IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v186y2023ics1364032123005403.html
   My bibliography  Save this article

Towards carbon-neutral world: The effect of renewable energy investments and technologies in G7 countries

Author

Listed:
  • Erdogan, Sinan
  • Pata, Ugur Korkut
  • Solarin, Sakiru Adebola

Abstract

Can renewable energy investments and technologies help achieve carbon neutrality goals? The answer to this question has been neglected until now due to a lack of data. The novelty of this study lies in its exploration of the influence of renewable energy investments and renewable energy technologies on reducing petroleum-derived carbon emissions for the first time in the Group of seven (G7) countries. An additional novel aspect of the study is to discuss how governance indicators, such as regulatory quality, political stability, and democracy, can influence the carbon neutrality targets of the G7 nations. To this end, the study applies second-generation panel data methods, such as the cross-sectionally augmented Dickey-Fuller unit root test, the Durbin-Hausmann panel cointegration test, and the panel augmented mean group estimator. The findings illustrate that renewable energy investments and technologies help reduce carbon emissions in different models. Additionally, while economic growth is beneficial to the environment, governance indicators have no effect on carbon emissions. Overall, the outcomes suggest that G7 countries should increase their investments in renewable energy and support clean technologies to achieve their carbon neutral targets. The study also points out that reducing oil consumption by promoting renewable energy technologies and investments is a critical step toward carbon neutrality for G7 policymakers.

Suggested Citation

  • Erdogan, Sinan & Pata, Ugur Korkut & Solarin, Sakiru Adebola, 2023. "Towards carbon-neutral world: The effect of renewable energy investments and technologies in G7 countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 186(C).
    • Handle: RePEc:eee:rensus:v:186:y:2023:i:c:s1364032123005403
    DOI: 10.1016/j.rser.2023.113683
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032123005403
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2023.113683?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Khan, Zeeshan & Ali, Shahid & Dong, Kangyin & Li, Rita Yi Man, 2021. "How does fiscal decentralization affect CO2 emissions? The roles of institutions and human capital," Energy Economics, Elsevier, vol. 94(C).
    2. Yang, Zikun & Zhang, Mingming & Liu, Liyun & Zhou, Dequn, 2022. "Can renewable energy investment reduce carbon dioxide emissions? Evidence from scale and structure," Energy Economics, Elsevier, vol. 112(C).
    3. Mesagan, Ekundayo Peter & Olunkwa, Chidi Ndubuisi, 2022. "Heterogeneous analysis of energy consumption, financial development, and pollution in Africa: The relevance of regulatory quality," Utilities Policy, Elsevier, vol. 74(C).
    4. Farhani, Sahbi & Mrizak, Sana & Chaibi, Anissa & Rault, Christophe, 2014. "The environmental Kuznets curve and sustainability: A panel data analysis," Energy Policy, Elsevier, vol. 71(C), pages 189-198.
    5. M. Hashem Pesaran, 2015. "Testing Weak Cross-Sectional Dependence in Large Panels," Econometric Reviews, Taylor & Francis Journals, vol. 34(6-10), pages 1089-1117, December.
    6. Xu, Deyi & Sheraz, Muhammad & Hassan, Arshad & Sinha, Avik & Ullah, Saif, 2022. "Financial development, renewable energy and CO2 emission in G7 countries: New evidence from non-linear and asymmetric analysis," Energy Economics, Elsevier, vol. 109(C).
    7. Goel, Rajeev K. & Herrala, Risto & Mazhar, Ummad, 2013. "Institutional quality and environmental pollution: MENA countries versus the rest of the world," Economic Systems, Elsevier, vol. 37(4), pages 508-521.
    8. Lee, Chien-Chiang & Hussain, Jafar, 2022. "Carbon neutral sustainability and green development during energy consumption," Innovation and Green Development, Elsevier, vol. 1(1).
    9. Luzzati, T. & Orsini, M., 2009. "Investigating the energy-environmental Kuznets curve," Energy, Elsevier, vol. 34(3), pages 291-300.
    10. Zhang, Dongyang & Mohsin, Muhammad & Taghizadeh-Hesary, Farhad, 2022. "Does green finance counteract the climate change mitigation: Asymmetric effect of renewable energy investment and R&D," Energy Economics, Elsevier, vol. 113(C).
    11. Adams, Samuel & Klobodu, Edem Kwame Mensah, 2017. "Urbanization, democracy, bureaucratic quality, and environmental degradation," Journal of Policy Modeling, Elsevier, vol. 39(6), pages 1035-1051.
    12. Sahbi Farhani & Sana Mrizak & Anissa Chaibi & Christophe Rault, 2014. "The Environmental Kuznets Curve and Sustainability: A Panel Data Analysis," CESifo Working Paper Series 4787, CESifo.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Waheed Ullah Shah & Ijaz Younis & Mohammad Zoynul Abedin & Xiyu Liu & Layal Isskandarani, 2025. "Innovative spillover strategies between global renewable energy and Islamic stock markets: safe hedging in shocks," Economic Change and Restructuring, Springer, vol. 58(4), pages 1-34, August.
    2. Ding, Zhixiong & Wu, Wei, 2024. "Simulation of a multi-level absorption thermal battery with variable solution flow rate for adjustable cooling capacity," Energy, Elsevier, vol. 301(C).
    3. Aytun, Cengiz & Erdogan, Sinan & Pata, Ugur Korkut & Cengiz, Orhan, 2024. "Associating environmental quality, human capital, financial development and technological innovation in 19 middle-income countries: A disaggregated ecological footprint approach," Technology in Society, Elsevier, vol. 76(C).
    4. Erdogan, Sinan, 2024. "Linking green fiscal policy, energy, economic growth, population dynamics, and environmental degradation: Empirical evidence from Germany," Energy Policy, Elsevier, vol. 189(C).
    5. Rajendran, Rajitha & Krishnaswamy, Jayaraman & Subramaniam, Nava & Viswanathan, P.K., 2025. "Renewable R&D investments and carbon emissions in G7 countries: The mediating roles of technology and economic efficiency," Utilities Policy, Elsevier, vol. 94(C).
    6. Chen, Jinglong & Wang, Dandan & Wang, Qinqin & Cai, Qiran, 2024. "Quantifying the synergy of China's carbon neutrality policies through policy documents," Renewable and Sustainable Energy Reviews, Elsevier, vol. 200(C).
    7. Mamoudou Camara, 2024. "How does the shift towards services affect renewable energy deployment? Evidence from OECD countries," Journal of Evolutionary Economics, Springer, vol. 34(3), pages 569-594, July.
    8. Zheng, Mingbo & Zhang, Xinyu, 2025. "Digitalization and renewable energy development: Analysis based on cross-country panel data," Energy, Elsevier, vol. 319(C).
    9. Yang, Shengyao & Zhu, Meng Nan & Yu, Haiyan, 2024. "Are artificial intelligence and blockchain the key to unlocking the box of clean energy?," Energy Economics, Elsevier, vol. 134(C).
    10. Gao, Yuan & Hu, Zehuan & Chen, Wei-An & Liu, Mingzhe & Ruan, Yingjun, 2025. "A revolutionary neural network architecture with interpretability and flexibility based on Kolmogorov–Arnold for solar radiation and temperature forecasting," Applied Energy, Elsevier, vol. 378(PA).
    11. Erdogan, Sinan, 2024. "On the impact of natural resources on environmental sustainability in African countries: A comparative approach based on the EKC and LCC hypotheses," Resources Policy, Elsevier, vol. 88(C).
    12. Wang, Yulin & Han, Mo & Liu, Kai, 2024. "Towards sustainable path: Measuring the effectiveness of natural resource utilization, renewable energy resources, fintech, environmental investments, and research & development," Resources Policy, Elsevier, vol. 93(C).
    13. Omri, Emna & Saadaoui, Haifa & Bazin, Damien, 2024. "Are renewable energy resources, oil price, and trade openness helping France achieve its environmental targets? Evidence from an asymmetric analysis," The Journal of Economic Asymmetries, Elsevier, vol. 30(C).
    14. Namahoro, Jean Pierre & Wu, Qiaosheng & Ihimbabzwe, Beatrice & Yang, Cheng, 2025. "Mineral resources and investment drive clean energy progress: Evidence from economic and governance effectiveness tiers," Energy, Elsevier, vol. 327(C).
    15. Pata, Ugur Korkut & Karlilar Pata, Selin, 2024. "Determining the effectiveness of the forest load capacity factor in assisting decarbonization in India," Forest Policy and Economics, Elsevier, vol. 166(C).
    16. Reguera Bueno, G. & Simal Pérez, N. & Cortés-Carmona, M. & Alonso-Montesinos, J., 2025. "Land use, soiling impact and distance to electrical grid applied to determine the viability of Solar Photovoltaic Systems in the south of Spain," Renewable Energy, Elsevier, vol. 239(C).
    17. Gao, Yuan & Hu, Zehuan & Shi, Shanrui & Chen, Wei-An & Liu, Mingzhe, 2024. "Adversarial discriminative domain adaptation for solar radiation prediction: A cross-regional study for zero-label transfer learning in Japan," Applied Energy, Elsevier, vol. 359(C).
    18. Yan, Xiaotong & Kan, Kan & Zheng, Yuan & Xu, Zhe & Rossi, Mosè & Xu, Lianchen & Chen, Huixiang, 2024. "The vortex dynamics characteristics in a pump-turbine: A rigid vorticity analysis while varying guide vane openings in turbine mode," Energy, Elsevier, vol. 289(C).
    19. Pata, Ugur Korkut, 2025. "How to progress towards sustainable development by leveraging renewable energy sources, technological advances, and human capital," Renewable Energy, Elsevier, vol. 241(C).
    20. Xie, Yongjing & Lin, Boqiang, 2025. "Financial leasing and China’s renewable energy firms' investment behavior: In the context of government subsidy reduction," Renewable and Sustainable Energy Reviews, Elsevier, vol. 214(C).
    21. Cao, Fangzhi & Su, Chi-Wei & Qin, Meng & Moldovan, Nicoleta-Claudia, 2024. "The investment of renewable energy: Is green bond a safe-haven to hedge U.S. monetary policy uncertainty?," Energy, Elsevier, vol. 307(C).
    22. Karlilar Pata, Selin & Pata, Ugur Korkut, 2025. "Comparative analysis of the impacts of solar, wind, biofuels and hydropower on load capacity factor and sustainable development index," Energy, Elsevier, vol. 319(C).
    23. Pei, Ji & Shen, Jiawei & Wang, Wenjie & Yuan, Shouqi & Zhao, Jiantao, 2024. "Evaluating hydraulic dissipation in a reversible mixed-flow pump for micro-pumped hydro storage based on entropy production theory," Renewable Energy, Elsevier, vol. 225(C).
    24. Li, Peidu & Luo, Yong & Xia, Xin & Shi, Wen & Zheng, Junqing & Liao, Zhouyi & Gao, Xiaoqing & Chang, Rui, 2024. "Advancing photovoltaic panel temperature forecasting: A comparative study of numerical simulation and machine learning in two types of PV power plant," Renewable Energy, Elsevier, vol. 237(PA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bruno Ibekilo & Chukwunonso Ekesiobi & Precious Muhammed Emmanuel, 2023. "Heterogeneous assessment of urbanisation, energy consumption and environmental pollution in Africa: the role of regulatory quality," Economic Change and Restructuring, Springer, vol. 56(6), pages 4421-4444, December.
    2. Hüseyin İçen, 2020. "Environmental Kuznets Curve in D8 Countries: Evidence from Panel Cointegration," EKOIST Journal of Econometrics and Statistics, Istanbul University, Faculty of Economics, vol. 0(32), pages 85-96, June.
    3. Tenaw, Dagmawe & Beyene, Abebe D., 2021. "Environmental sustainability and economic development in sub-Saharan Africa: A modified EKC hypothesis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    4. Konstantinos Bletsas & Georgios Oikonomou & Minas Panagiotidis & Eleftherios Spyromitros, 2022. "Carbon Dioxide and Greenhouse Gas Emissions: The Role of Monetary Policy, Fiscal Policy, and Institutional Quality," Energies, MDPI, vol. 15(13), pages 1-24, June.
    5. Luzzati, Tommaso & Orsini, Marco & Gucciardi, Gianluca, 2018. "A multiscale reassessment of the Environmental Kuznets Curve for energy and CO2 emissions," Energy Policy, Elsevier, vol. 122(C), pages 612-621.
    6. Antonios Garas & Sophie Guthmuller & Athanasios Lapatinas, 2021. "The development of nations conditions the disease space," PLOS ONE, Public Library of Science, vol. 16(1), pages 1-35, January.
    7. Olimpia Neagu, 2019. "The Link between Economic Complexity and Carbon Emissions in the European Union Countries: A Model Based on the Environmental Kuznets Curve (EKC) Approach," Sustainability, MDPI, vol. 11(17), pages 1-27, August.
    8. Agboola, Mary Oluwatoyin & Bekun, Festus Victor & Joshua, Udi, 2021. "Pathway to environmental sustainability: Nexus between economic growth, energy consumption, CO2 emission, oil rent and total natural resources rent in Saudi Arabia," Resources Policy, Elsevier, vol. 74(C).
    9. repec:ipg:wpaper:2014-496 is not listed on IDEAS
    10. Chien, Fengsheng & Anwar, Ahsan & Hsu, Ching-Chi & Sharif, Arshian & Razzaq, Asif & Sinha, Avik, 2021. "The role of information and communication technology in encountering environmental degradation: Proposing an SDG framework for the BRICS countries," Technology in Society, Elsevier, vol. 65(C).
    11. Ding, Yuanyi, 2023. "Does natural resources cause sustainable financial development or resources curse? Evidence from group of seven economies," Resources Policy, Elsevier, vol. 81(C).
    12. Manel Kamoun & Ines Abdelkafi & Abdelfetah Ghorbel, 2019. "The Impact of Renewable Energy on Sustainable Growth: Evidence from a Panel of OECD Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(1), pages 221-237, March.
    13. Ahmad Ahmad & Temitope J. Laniran, 2021. "FDI, Economic performance and CO2 discharge in Nigeria," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 8(3), pages 50-54, March.
    14. Manel Kamoun & Ines Abdelkafi & Abdelfetah Ghorbel, 2020. "Does Renewable Energy Technologies and Poverty Affect the Sustainable Growth in Emerging Countries?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(3), pages 865-887, September.
    15. Rodríguez, Miguel & Pena-Boquete, Yolanda & Pardo-Fernández, Juan Carlos, 2016. "Revisiting Environmental Kuznets Curves through the energy price lens," Energy Policy, Elsevier, vol. 95(C), pages 32-41.
    16. Aslan, Alper & Destek, Mehmet Akif & Okumus, İlyas, 2017. "Sectoral carbon emissions and economic growth in the US: Further evidence from rolling window estimation method," MPRA Paper 106961, University Library of Munich, Germany.
    17. Rauf, Abdul & Zhang, Jin & Li, Jinkai & Amin, Waqas, 2018. "Structural changes, energy consumption and carbon emissions in China: Empirical evidence from ARDL bound testing model," Structural Change and Economic Dynamics, Elsevier, vol. 47(C), pages 194-206.
    18. Kais Saidi & Mohammad Mafizur Rahman, 2021. "The link between environmental quality, economic growth, and energy use: new evidence from five OPEC countries," Environment Systems and Decisions, Springer, vol. 41(1), pages 3-20, March.
    19. repec:ipg:wpaper:2014-491 is not listed on IDEAS
    20. Seker, Fahri & Ertugrul, Hasan Murat & Cetin, Murat, 2015. "The impact of foreign direct investment on environmental quality: A bounds testing and causality analysis for Turkey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 347-356.
    21. Ben Youssef, Adel & Boubaker, Sabri & Omri, Anis, 2018. "Entrepreneurship and sustainability: The need for innovative and institutional solutions," Technological Forecasting and Social Change, Elsevier, vol. 129(C), pages 232-241.
    22. Azam, Muhammad & Khan, Abdul Qayyum, 2016. "Testing the Environmental Kuznets Curve hypothesis: A comparative empirical study for low, lower middle, upper middle and high income countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 63(C), pages 556-567.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:rensus:v:186:y:2023:i:c:s1364032123005403. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.