The impact of the transition to a green economy on Romania’s economic growth

Abstract

Background

Globally and regionally, nations are going through a period of important changes determined by the climate and environmental challenges in the context of the transition towards green economy, by the energy crisis caused by the Russian–Ukrainian war started in 2022, as well as the economic and social effects of the COVID-19 pandemics, which all affect economic growth. Providing a sustainable development capable of contributing to the increase of welfare and life longevity requires high rates of economic growth as well as a healthy living environment. At present, boosting the transition to the green economy is considered as an alternative. Based on a multivariable linear regression model, this study aims to analyze the connection and influence of five macroeconomic indicators, on Romania’s economic growth over a period of 16 years (2006–2021), where the indicators are considered to be representative for green economy.

Results

The results pinpoint both the existence of a positive and long-term relation among the total greenhouse gas emissions, the value of the production of environmental goods and services, the total environmental taxes and real GDP, and the negative impact of the total generation of renewable electricity and investments for environmental protection upon real GDP. These results provide a relevant picture of the complex interdependences between the environmental indicators and economic growth, amid the significant challenges determined by the implementation of sustainability strategies.

Conclusions

Romania’s transition towards green economy not only represents an initiative based on the obligations resulting from joining the European Union’s Green Agenda, but also results from acknowledging the consequences of climate change; in accordance, our analysis intends to empower policy makers in intensifying the current levels of the total generation of renewable energy and the investments for environmental protection, so that these might reach the thresholds required to transform them into decisive factors of economic growth.