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Li, Binlin; Haneklaus, Nils
Energy reports, July 2022, 2022-07-00, 2022-07-01, Volume: 8Journal Article
This investigation assessed the relationship between clean energy consumption, GDP, trade openness, urbanization, and CO2 emissions in the G7 economies from 1979 to 2019. The specific goal of this work is to scrutinize the long- and short-run dynamics of clean energy consumption, trade openness, and urbanization in CO2 emissions reduction in G7 economies. Panel Autoregressive Distributed Lag (ARDL) is used to illustrate the long-run and short-run dynamics between CO2 emissions, clean energy consumption, trade openness and urbanization after testing slope heterogeneity, cross-section dependence, and long-run cointegration. The empirical findings verify the existence of the Environmental Kuznets Curve (EKC) in the long run. A 1% increase in clean energy consumption on the other hand decreased CO2 emissions by 0.099% in the long run and 0.33% in the short run. In addition, the results support the thesis that trade openness increases CO2 emissions and increased urbanization decreases CO2 emissions. This study intensifies the use of nuclear energy, hydropower and renewables to improve sustainable energy production and the quality of the environment. The results are limited to a certain region and a certain period of time, but provide quantitative analysis that may be of interest to policy makers everywhere.
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