Do Environmental Performance and Renewable Energy Move Together?

Abstract

This study aims to examine the cointegration and causal links between carbon dioxide (CO2) emissions and renewable energy by employing panel data covering 41 countries from 1973 to 2017. Our empirical results suggest that CO2 emissions and renewable energy move together in Organisation for Economic Co-operation and Development (OECD) countries, but not in non-OECD countries. There exists a long-run causal flow from renewable energy to CO2 emissions in OECD countries, and vice versa. However, there is a unidirectional causal flow from CO2 emissions to renewable energy in non-OECD countries in the long run.