IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i2p704-d1569261.html
   My bibliography  Save this article

Testing the Impact of Renewable Energy and Institutional Quality on Consumption-Based CO 2 Emissions: Fresh Insights from MMQR Approach

Author

Listed:
  • Abdulateif A. Almulhim

    (Department of Finance, King Faisal University, Al-Ahsa 31982, Saudi Arabia)

  • Nasiru Inuwa

    (Department of Economics, Gombe State University, Gombe 760214, Nigeria)

  • Maroua Chaouachi

    (Department of Finance, King Faisal University, Al-Ahsa 31982, Saudi Arabia)

  • Ahmed Samour

    (Department of Accounting, Dhofar University, Salalah 211, Oman)

Abstract

The motivation for this research stems from the United Nations Sustainable Development Goals (UN SDGs), specifically SDGs 7, 11, 12, and 13, which focus on the mitigation of climate change and sustainable economic development. This study examined the impact of renewable energy use, institutional quality, and production expansion on consumption-based carbon dioxide (CCO 2 ) emissions in BRICS countries (Brazil, Russia, India, China, and South Africa) from 1996 to 2020. To achieve this, we applied advanced econometric techniques, including second-generation cointegration and unit root tests, along with the novel panel method of moments quantile regression (MMQR). The Westerlund cointegration test confirmed the presence of a long-run co-movement among renewable energy usage, economic growth, institutional quality, and environmental quality, suggesting a stable equilibrium relationship between these variables. The results from MMQR reveal that GDP has a positive and statistically significant effect on CCO 2 emissions across all quantiles, indicating that economic expansion contributes to environmental degradation. In contrast, renewable energy consumption and institutional quality show negative and significant impacts on CCO 2 emissions, indicating their mitigating effect on environmental deterioration. As a robustness check, the findings from fixed-effect OLS (FE-OLS), generalized method of moments (GMM), and common correlated effects mean group (CCEMG) estimations broadly confirm the results of MMQR. These findings underscore the importance of renewable energy consumption and strong institutional frameworks in promoting environmental sustainability.

Suggested Citation

  • Abdulateif A. Almulhim & Nasiru Inuwa & Maroua Chaouachi & Ahmed Samour, 2025. "Testing the Impact of Renewable Energy and Institutional Quality on Consumption-Based CO 2 Emissions: Fresh Insights from MMQR Approach," Sustainability, MDPI, vol. 17(2), pages 1-17, January.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:2:p:704-:d:1569261
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/2/704/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/2/704/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ozturk, Ilhan & Acaravci, Ali, 2010. "CO2 emissions, energy consumption and economic growth in Turkey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(9), pages 3220-3225, December.
    2. Alsamara, Mouyad & Mrabet, Zouhair & Dombrecht, Michel, 2018. "Asymmetric import cost pass-through in GCC countries: Evidence from nonlinear panel analysis," Economic Modelling, Elsevier, vol. 75(C), pages 432-440.
    3. Pata, Ugur Korkut & Caglar, Abdullah Emre, 2021. "Investigating the EKC hypothesis with renewable energy consumption, human capital, globalization and trade openness for China: Evidence from augmented ARDL approach with a structural break," Energy, Elsevier, vol. 216(C).
    4. Hu, Hui & Xie, Nan & Fang, Debin & Zhang, Xiaoling, 2018. "The role of renewable energy consumption and commercial services trade in carbon dioxide reduction: Evidence from 25 developing countries," Applied Energy, Elsevier, vol. 211(C), pages 1229-1244.
    5. Choi, In, 2001. "Unit root tests for panel data," Journal of International Money and Finance, Elsevier, vol. 20(2), pages 249-272, April.
    6. Xie, Qichang & Liu, Junxian, 2019. "Combined nonlinear effects of economic growth and urbanization on CO2 emissions in China: Evidence from a panel data partially linear additive model," Energy, Elsevier, vol. 186(C).
    7. Mahalik, Mantu Kumar & Mallick, Hrushikesh & Padhan, Hemachandra, 2021. "Do educational levels influence the environmental quality? The role of renewable and non-renewable energy demand in selected BRICS countries with a new policy perspective," Renewable Energy, Elsevier, vol. 164(C), pages 419-432.
    8. Muhammad Shahbaz & Smile Dube & Ilhan Ozturk & Abdul Jalil, 2015. "Testing the Environmental Kuznets Curve Hypothesis in Portugal," International Journal of Energy Economics and Policy, Econjournals, vol. 5(2), pages 475-481.
    9. Hashem Pesaran, M. & Yamagata, Takashi, 2008. "Testing slope homogeneity in large panels," Journal of Econometrics, Elsevier, vol. 142(1), pages 50-93, January.
    10. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    11. Joakim Westerlund, 2007. "Testing for Error Correction in Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(6), pages 709-748, December.
    12. Arouri, Mohamed El Hedi & Ben Youssef, Adel & M'henni, Hatem & Rault, Christophe, 2012. "Energy consumption, economic growth and CO2 emissions in Middle East and North African countries," Energy Policy, Elsevier, vol. 45(C), pages 342-349.
    13. Ahmed Samour & Joshua Chukwuma Onwe & Nasiru Inuwa & Muhammad Imran, 2024. "Insurance market development, renewable energy, and environmental quality in the UAE: Novel findings from a bootstrap ARDL test," Energy & Environment, , vol. 35(2), pages 610-627, March.
    14. Raufhon Salahodjaev & Kongratbay Sharipov & Nizomiddin Rakhmanov & Dilshod Khabirov, 2022. "Tourism, renewable energy and CO2 emissions: evidence from Europe and Central Asia," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(11), pages 13282-13293, November.
    15. Pesaran, M. Hashem & Vanessa Smith, L. & Yamagata, Takashi, 2013. "Panel unit root tests in the presence of a multifactor error structure," Journal of Econometrics, Elsevier, vol. 175(2), pages 94-115.
    16. Zhang, Yue-Jun & Jin, Yan-Lin & Chevallier, Julien & Shen, Bo, 2016. "The effect of corruption on carbon dioxide emissions in APEC countries: A panel quantile regression analysis," Technological Forecasting and Social Change, Elsevier, vol. 112(C), pages 220-227.
    17. Bosede Ngozi Adeleye & Darlington Akam & Nasiru Inuwa & Muftau Olarinde & Victoria Okafor & Ifeoluwa Ogunrinola & Paul Adekola, 2021. "Investigating Growth-Energy-Emissions Trilemma in South Asia," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 112-120.
    18. Muhammad Awais Baloch & Ilhan Ozturk & Festus Victor Bekun & Danish Khan, 2021. "Modeling the dynamic linkage between financial development, energy innovation, and environmental quality: Does globalization matter?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 176-184, January.
    19. Wang, Zhaohua & Danish, & Zhang, Bin & Wang, Bo, 2018. "The moderating role of corruption between economic growth and CO2 emissions: Evidence from BRICS economies," Energy, Elsevier, vol. 148(C), pages 506-513.
    20. Mei Ling Wang & Vincent Sarkodie Ntim & Jiameng Yang & Qiongjie Zheng & Limin Geng, 2022. "Effect of institutional quality and foreign direct investment on economic growth and environmental quality: evidence from African countries," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 4065-4091, December.
    21. Dorota Wawrzyniak & Wirginia Doryń, 2020. "Does the quality of institutions modify the economic growth-carbon dioxide emissions nexus? Evidence from a group of emerging and developing countries," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 33(1), pages 124-144, January.
    22. Balsalobre-Lorente, Daniel & Shahbaz, Muhammad & Roubaud, David & Farhani, Sahbi, 2018. "How economic growth, renewable electricity and natural resources contribute to CO2 emissions?," Energy Policy, Elsevier, vol. 113(C), pages 356-367.
    23. Lau, Lin-Sea & Choong, Chee-Keong & Eng, Yoke-Kee, 2014. "Carbon dioxide emission, institutional quality, and economic growth: Empirical evidence in Malaysia," Renewable Energy, Elsevier, vol. 68(C), pages 276-281.
    24. Bilgili, Faik & Koçak, Emrah & Bulut, Ümit, 2016. "The dynamic impact of renewable energy consumption on CO2 emissions: A revisited Environmental Kuznets Curve approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 838-845.
    25. Mohammed Musah & Yusheng Kong & Isaac Adjei Mensah & Stephen Kwadwo Antwi & Agyemang Andrew Osei & Mary Donkor, 2021. "Modelling the connection between energy consumption and carbon emissions in North Africa: Evidence from panel models robust to cross-sectional dependence and slope heterogeneity," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(10), pages 15225-15239, October.
    26. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    27. Arminen, Heli & Menegaki, Angeliki N., 2019. "Corruption, climate and the energy-environment-growth nexus," Energy Economics, Elsevier, vol. 80(C), pages 621-634.
    Full references (including those not matched with items on IDEAS)

    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. Umut Uzar, 2022. "The connection between freedom of the press and environmental quality: An investigation on emerging market countries," Natural Resources Forum, Blackwell Publishing, vol. 46(1), pages 21-38, February.
    2. Muhammad Sadiq & Syed Tauseef Hassan & Irfan Khan & Mohammad Mafizur Rahman, 2024. "Policy uncertainty, renewable energy, corruption and CO2 emissions nexus in BRICS-1 countries: a panel CS-ARDL approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(8), pages 21595-21621, August.
    3. Li, Rongrong & Wang, Qiang & Li, Lejia & Hu, Sailan, 2023. "Do natural resource rent and corruption governance reshape the environmental Kuznets curve for ecological footprint? Evidence from 158 countries," Resources Policy, Elsevier, vol. 85(PB).
    4. Javed, Aamir & Rapposelli, Agnese & Khan, Feroz & Javed, Asif & Abid, Nabila, 2024. "Do green technology innovation, environmental policy, and the transition to renewable energy matter in times of ecological crises? A step towards ecological sustainability," Technological Forecasting and Social Change, Elsevier, vol. 207(C).
    5. Shobande, Olatunji & Asongu, Simplice, 2021. "The rise and fall of the energy-carbon Kuznets curve: Evidence from Africa," MPRA Paper 110852, University Library of Munich, Germany.
    6. Kangyin Dong & Xiucheng Dong & Qingzhe Jiang, 2020. "How renewable energy consumption lower global CO2 emissions? Evidence from countries with different income levels," The World Economy, Wiley Blackwell, vol. 43(6), pages 1665-1698, June.
    7. Huang, Lingyun & Zou, Yanjun, 2020. "How to promote energy transition in China: From the perspectives of interregional relocation and environmental regulation," Energy Economics, Elsevier, vol. 92(C).
    8. Yang, Shuangpeng & umar, Muhammad, 2022. "How globalization is reshaping the environmental quality in G7 economies in the presence of renewable energy initiatives?," Renewable Energy, Elsevier, vol. 193(C), pages 128-135.
    9. Ahmad, Mahmood & Ahmed, Zahoor & Khan, Sana Akbar & Alvarado, Rafael, 2023. "Towards environmental sustainability in E−7 countries: Assessing the roles of natural resources, economic growth, country risk, and energy transition," Resources Policy, Elsevier, vol. 82(C).
    10. Wenjing Zhang & Hengzhou Xu, 2017. "Exploring the causal relationship between carbon emissions and land urbanization quality in China using a panel data analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 19(4), pages 1445-1462, August.
    11. Ren, Zhiyuan & Zhu, Yuhan, 2025. "The trade-off between middle class and ecological footprint: Empirical cross-country analysis," Ecological Economics, Elsevier, vol. 235(C).
    12. Cristiana Tudor & Robert Sova, 2021. "On the Impact of GDP per Capita, Carbon Intensity and Innovation for Renewable Energy Consumption: Worldwide Evidence," Energies, MDPI, vol. 14(19), pages 1-25, October.
    13. Muhammad Bilal Khan & Hummera Saleem & Malik Shahzad Shabbir & Xie Huobao, 2022. "The effects of globalization, energy consumption and economic growth on carbon dioxide emissions in South Asian countries," Energy & Environment, , vol. 33(1), pages 107-134, February.
    14. Škare, Marinko & Porada-Rochoń, Małgorzata, 2023. "Are we making progress on decarbonization? A panel heterogeneous study of the long-run relationship in selected economies," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    15. Li, Yi & Liu, Christy Ying Ni & Lao, Ut & Dang, Jiangtong, 2024. "Navigating the path to environmental sustainability: Exploring the role of fintech, natural resources and green energy in Belt and Road countries," Resources Policy, Elsevier, vol. 88(C).
    16. Acar, Pinar & Berk, Istemi, 2022. "Power infrastructure quality and industrial performance: A panel data analysis on OECD manufacturing sectors," Energy, Elsevier, vol. 239(PC).
    17. Melina Dritsaki & Chaido Dritsaki, 2024. "The Relationship Between Health Expenditure, CO2 Emissions, and Economic Growth in G7: Evidence from Heterogeneous Panel Data," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 4886-4911, March.
    18. Abdullah Emre Caglar & Bulent Guloglu & Ayfer Gedikli, 2022. "Moving towards sustainable environmental development for BRICS: Investigating the asymmetric effect of natural resources on CO2," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(5), pages 1313-1325, October.
    19. Belaïd, Fateh & Zrelli, Maha Harbaoui, 2019. "Renewable and non-renewable electricity consumption, environmental degradation and economic development: Evidence from Mediterranean countries," Energy Policy, Elsevier, vol. 133(C).
    20. Zhou, Anhua & Li, Jun, 2022. "How do trade liberalization and human capital affect renewable energy consumption? Evidence from the panel threshold model," Renewable Energy, Elsevier, vol. 184(C), pages 332-342.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    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:gam:jsusta:v:17:y:2025:i:2:p:704-:d:1569261. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.