Can green resource productivity, renewable energy, and economic globalization drive the pursuit of carbon neutrality in the top energy transition economies?

Abstract

This research explores the role of green resource productivity, renewable energy, economic globalization, and economic growth towards advancing the pursuits of decarbonization in top energy transition economies. This study achieves this objective by adopting both asymmetric and symmetric econometric methods for the period between 1990 and 2021. This study adopted the Method of Moments Quantile Regression (MMQR) to uncover the asymmetric effect of the regressors on carbon emissions. The MMQR results suggest that in all quantiles, green resource productivity, renewable energy, and economic globalization mitigate CO2 emissions, while economic growth induces CO2 emissions. Additionally, for the robustness analysis, we disaggregated economic globalization into trade and financial globalization and investigated their roles towards achieving decarbonization. We uncovered that financial globalization mitigates CO2 emissions at all quantiles, but at the lower and middle quantiles, trade globalization mitigates CO2 emissions. Moreover, for the symmetric estimation, the following estimators: Fixed effect Ordinary Least Square, Fully Modified Ordinary Least Square, and Dynamic Ordinary Least Square estimators were employed in this study. Their outcome corroborated the findings of this MMQR. For the Granger causality inference, the outcome suggests that there is a bi-directional causality between renewable energy and CO2 emissions. Furthermore, we find a feedback causality association between financial globalization and CO2 emissions, and a one-way causal interconnection is detected from CO2 emissions to trade globalization. Moreover, we detected that there is a causal association flowing from economic globalization to CO2 emissions. Finally, an unidirectional causal interaction is detected from economic growth to CO2 emissions. Consequently, the research’s findings provide applicable policy.

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