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Does Renewable Energy Sector Affect Industrialization-CO 2 Emissions Nexus in Europe and Central Asia?

Author

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  • Grzegorz Mentel

    (Department of Quantitative Methods, Faculty of Management, Rzeszow University of Technology, 35-959 Rzeszow, Poland)

  • Waldemar Tarczyński

    (Department of Sustainable Finance and Capital Markets, Institute of Economics and Finance, University of Szczecin, 71-101 Szczecin, Poland)

  • Marek Dylewski

    (Institute of Economics and Finance, WSB University in Poznan, Powstańców Wielkopolskich 5, 61-895 Poznan, Poland)

  • Raufhon Salahodjaev

    (School of Business, Akfa University, 264, Milliy Bog Street, Kibray District, Tashkent 111221, Uzbekistan
    ERGO Analytics, 18/1 Oybek Street, Tashkent 100000, Uzbekistan)

Abstract

Current research assesses the impact of industrialization and the renewable energy sector on greenhouse gas emissions, proxied by CO 2 emissions in Europe and Central Asia. We rely on a two-step system GMM estimator on a sample of 48 countries over the period 2000–2018. Empirical results show that industrialization has a positive effect on CO 2 emissions: a 10% increase in industry value added as % of GDP leads to an increase of 2.6% in CO 2 emissions. In contrast, renewable energy mitigates CO 2 emissions. Ten percentage points increase in renewable energy consumption reduces CO 2 emissions per capita by 2.2%. The interaction term between renewable energy and industry value added is negative, suggesting that renewable energy consumption compensates for the negative effect of industrialization on environmental quality. Our main results also confirm the U-shaped inverted relationship between GDP per capita and CO 2 emissions. Our study has a number of policy implications and avenues for future research.

Suggested Citation

  • Grzegorz Mentel & Waldemar Tarczyński & Marek Dylewski & Raufhon Salahodjaev, 2022. "Does Renewable Energy Sector Affect Industrialization-CO 2 Emissions Nexus in Europe and Central Asia?," Energies, MDPI, vol. 15(16), pages 1-12, August.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:16:p:5877-:d:887424
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    References listed on IDEAS

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