REASSESSING THE IMPACT OF RENEWABLE ENERGY USE ON CO2 EMISSIONS IN THE EU COUNTRIES USING A PANEL QUANTILE FRAMEWORK

Lavinia Maria ILOIE, Claudiu Tiberiu ALBULESCU

Abstract


This research investigates the factors contributing to the decrease in carbon emissions across EU countries, with a focus on renewable energy use. For this purpose, we rely on a panel data framework covering 33 years and 27 EU countries. We examine the influence of green energy sources on carbon pollutants, involving other variables for control, namely the income per capita growth rate, foreign investment inflows, population, and labor force (for robustness purposes). First, we use an Ordinary Least Squares (OLS) model that incorporates both fixed and random effects. Second, as novelty, we perform a panel quantile regression analysis to see if the renewables’ impact on emissions is asymmetric and depends on the carbon emissions’ level. The first set of results showed that increased renewable energy consumption leads to lower CO₂ emissions. At the same time, the findings generated within a panel quantile framework revealed that the effect of renewable energies is more substantial in countries with lower emissions. 


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