The Impact Of Renewable Energy Consumption And Financial Development On Carbon Emissions In European Countries With High Carbon Emissions

In the Sustainable Development Goals (SDGs) set by the United Nations, renewable energy and financial development are considered to be critical components to combat global warming and limit global temperature increases to 1.5 °C and will help in achieving the SDGs. The fact that Sustainable Development has become an important issue in European countries has led researchers to examine the broad interactions between sustainable development indicators. For this purpose, the ten European countries with the highest carbon emissions are examined to determine how financial development, renewable energy consumption and economic growth contribute to environmental protection. In the study, the impact of financial development, renewable energy consumption and economic growth on carbon emissions in the period between 2000 and 2021 was analyzed using Westerlund (2007) cointegration test and CCE-AMG estimators. The results show that all variables are cointegrated in the long run and that renewable energy has a negative effect on environmental degradation and financial development has a positive effect. According to the results of Dumitrescu and Hurlin (D-H) causality test, while there was a unidirectional causality from financial development and economic growth to CO2 emissions, it was observed that there was a bidirectional causality between renewable energy consumption and CO2 emissions. The findings show that it may have important consequences for European countries in terms of environmental policy.