Nexus Between Economic Development and Renewable Energy on Co2
DOI:
https://doi.org/10.22105/masi.v2i1.55Keywords:
Economic development, Renewable energy, Carbon-dioxideAbstract
This study examined the nexus between economic development and renewable energy on CO2 using data from forty-five nations in the SSA area from 1980 and 2020. It delved into how the growing economy impacts renewable energy in terms of CO2 emissions. For the empirical analysis, the Generalized Method of Moments (GMM) was employed. The study revealed there is a bidirectional form of causation between economic developments and renewable energy CO2 emissions. By examining the conditional link between renewable energy and environmental quality, this research adds to the existing literature. Fixed effects and quantile fixed effects regressions are used to support the empirical evidence. Renewable energy consistently reduces Carbon Dioxide (CO2) emissions, according to both estimation approaches. Hence, there is a close nexus between economic development and renewable energy on CO2 emission. The fact that there is a negative effect of renewable energy on CO2 implies that the adoption of renewable energy consistently reduces CO2 emissions and enhances economic development. It was recommended that authorities encourage powering economies with clean energy, replacing polluting coal, gas, and oil-fired power stations with renewable energy sources, such as wind and solar farms, knowing that renewable energy is not only cleaner but also cheaper these days. The government should also develop policies and coordinate government educational programs on climate change, which will, in turn, be the National Climate Change Action Plan that will serve as a road map that will improve energy efficiency and switch away from non-renewable energy to renewable energy. A carbon tax policy can also be introduced that will shift the economy away from carbon-intensive industries.
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