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Energy transition and CO₂ emissions: Fresh insight from low, middle and high-income countries

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  • Pakrooh, Parisa
  • Nammouri, Hela
  • Ben Jabeur, Sami

Abstract

The energy transition to sustainable systems is critical in mitigating carbon dioxide (CO₂) emissions and achieving energy security. This study systematically analyzes the impact of transitioning from fossil fuels to renewable energy sources across countries of low, middle, and high-income levels, considering complex factors such as social aspects, legislative actions, and economic conditions that influence these transitions. For this aim, the GreenQ index introduced by Lau et al. (2023); a robust econometric model, the Cross-sectionally Augmented Autoregressive Distributed Lag (CS-ARDL) technique by Chudik and Pesaran (2015); and the Dumitrescu and Hurlin (2012) non-Granger causality test are applied to panel data from 1965 to 2021 of 53 countries. Findings highlight that advancements in green energy technologies and stringent legislative frameworks significantly reduce CO₂ emissions, particularly in high-income countries. Additionally, the results show that trade openness is associated with a slight reduction in emissions in low- and middle-income countries, while urbanization and political liberties have varying impacts depending on the income level of the country.

Suggested Citation

  • Pakrooh, Parisa & Nammouri, Hela & Ben Jabeur, Sami, 2025. "Energy transition and CO₂ emissions: Fresh insight from low, middle and high-income countries," Research in International Business and Finance, Elsevier, vol. 76(C).
  • Handle: RePEc:eee:riibaf:v:76:y:2025:i:c:s0275531925001369
    DOI: 10.1016/j.ribaf.2025.102880
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    More about this item

    Keywords

    CO₂ emissions; Climate change; Energy transition; Sustainable development;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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