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Heterogeneous Analysis of Pollution Abatement via Renewable and Non-renewable Energy: Lessons from Investment in G20 Nations


  • Kazeem Bello Ajide

    (University of Lagos, Nigeria)

  • Ekundayo Peter Mesagan

    (University of Lagos, Nigeria)


Environmental sustainability and climatic change mitigation seem central in the fight against global warming and continuous human sustenance in the 21st century. However, non-renewable and renewable consumption energies lie at the core of these pollution concerns, particularly among the G20 economies that are top pollution emitters in the world. Unlike other mediators in energy-pollution nexus, capital investment has been argued to ameliorate or amplify the relationship. To this end, the study specifically sets out to unravel the mediating role of capital investment in energy-pollution link together with other pollution confounders including trade openness, foreign direct investment and energy use for G20 economies over the period 1990-2017. Using the pooled mean group estimator, the study accounts for both cross-sectional dependence and heterogeneity among the countries. They key findings show that renewable energy to negatively impact carbon emissions in both the short- and long-run, while non-renewable energy positively having a reverse impact. In addition, the results show that capital investment as lowering pollution in the short-run but increases it in the long-run. Lastly, on interacting capital investment with renewable energy, pollution is found to reduce to pollution in both short- and long-run, while its interaction with non-renewable energy expands pollution in both short- and long-run. On the policy front, since capital investment provides an important channel to reduce pollution in G20 nations, it is therefore recommended that if energy consumption is to work through the capital investment channel to lower pollution in the G20, the proportion of renewable energy must increase relative to non-renewable energy in their energy mix.

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  • Kazeem Bello Ajide & Ekundayo Peter Mesagan, 2022. "Heterogeneous Analysis of Pollution Abatement via Renewable and Non-renewable Energy: Lessons from Investment in G20 Nations," Working Papers 22/017, European Xtramile Centre of African Studies (EXCAS).
  • Handle: RePEc:exs:wpaper:22/017

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    2. Ma, Beiling & Sharif, Arshian & Bashir, Madiha & Bashir, Muhammad Farhan, 2023. "The dynamic influence of energy consumption, fiscal policy and green innovation on environmental degradation in BRICST economies," Energy Policy, Elsevier, vol. 183(C).
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    More about this item


    Capital Investment; Renewable Energy; Non-renewable Energy; Carbon Emissions;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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