Spatial spillover effects of renewable energy transition, innovation, and energy efficiency on carbon emissions in Europe

The transition to a low-carbon economy remains a pivotal challenge for global sustainability, with European nations at the forefront of policy experimentation. This study investigates the spatial spillover effects of renewable energy adoption, technological innovation, and energy efficiency improvements on carbon emissions across 28 European countries from 1990 to 2022. Using spatial econometric models, including the spatial Durbin model (SDM) and spatial autoregressive model (SAR), our analysis reveals significant interdependencies in emission patterns between neighboring nations. Results demonstrate that traditional estimation methods inadequately capture regional spillovers, with GDP per capita exhibiting a paradoxical dual role it positively correlates with local emissions while generating negative spatial externalities. Conversely, the renewable energy shares in national grids and cross-border innovation diffusion substantially reduce pollution both locally and in neighboring countries. The findings underscore the necessity for harmonized transnational policies that emphasize renewable infrastructure investments, foster collaborative innovation frameworks, and address spatial dependencies in emission trajectories. These measures could accelerate Europe’s green transition while balancing economic growth with ecological constraints.