Poland's net-zero pathways: Moderating role of carbon tax and renewable energy on electricity generation through a novel multivariate quantile-on-quantile regression approach

Abstract

The global effort to meet the Paris Agreement's target of limiting global warming to 1.5 °C and achieving net-zero CO₂ emissions by 2050 is currently off track, with Poland facing significant challenges related to energy inefficiency and rising CO₂ emissions. In Poland, the energy sector is responsible for 43% of greenhouse gas emissions, with transportation and buildings contributing 19% and 16%, respectively (Brzeziński and Kolinski, 2024). This study explores the role of carbon taxes and renewable energy generation in shaping the macroeconomic effects of electricity generation in Poland, focusing on the period from 1990 to 2020. We employ multivariate quantile-on-quantile regression with Granger causality to analyse the relationships between carbon taxation, renewable energy generation, and CO₂ emissions. The findings suggest that effective carbon tax policies, coupled with increased investment in renewable energy, are crucial for reducing emissions in Poland's electricity generation sector. These measures are essential for aligning with global climate goals and achieving carbon neutrality. The study contributes to the growing literature by examining these moderating factors in the context of Poland's energy transition.