The Effect of Renewable Energy Development on Carbon Emission Reduction: An Empirical Analysis for the EU-15 Countries

29 Pages Posted: 1 Mar 2014

See all articles by Shahrouz Abolhosseini

Shahrouz Abolhosseini

Seoul National University

Almas Heshmati

Sogang University; Jönköping International Business School

Jorn Altmann

International University of Bruchsal

Abstract

The increased concerns about climate change have made renewable energy sources an important topic of research. Several scholars have applied different methodologies to examine the relationships between energy consumption and economic growth of individual and groups of countries and to analyze the environmental effects of energy policies. Previous studies have analyzed carbon emission savings, using renewable energy usage as an individual source or in combination with traditional sources of energy (e.g., hybrid plants) in connection with lifecycle analysis methods. It is shown that after a certain period, economic growth leads to the promotion of environmental quality. However, econometric modelling critiques have opposed the results of these studies. One reason is that the effectiveness of governance-related parameters has previously been neglected. In this research, we analyze the impact of renewable energy development on carbon emission reduction. We estimate a model to evaluate the effectiveness of renewable energy development, technological innovation, and market regulations in carbon emission reduction. The empirical results are based on a panel data estimation using the EU-15 countries data observed from 1995 to 2010. The elasticities of CO2 emissions are estimated, in order to evaluate the effectiveness of each parameter. The findings show that the effects of a negative climate change could be mitigated by governance-related parameters instead of economic development.

Keywords: renewable energy, technological innovation, environmental tax, carbon emission, economic growth

JEL Classification: D62, H23, N50, O13, O14

Suggested Citation

Abolhosseini, Shahrouz and Heshmati, Almas and Altmann, Jorn, The Effect of Renewable Energy Development on Carbon Emission Reduction: An Empirical Analysis for the EU-15 Countries. IZA Discussion Paper No. 7989. Available at SSRN: https://ssrn.com/abstract=2403126

Shahrouz Abolhosseini (Contact Author)

Seoul National University ( email )

Almas Heshmati

Sogang University ( email )

Seoul 121-742
Korea, Republic of (South Korea)
0082-2-705-8771 (Phone)

HOME PAGE: http://www.sogang.ac.kr/english/academic/03_under_0123.html

Jönköping International Business School ( email )

Jönköping, 551 11
Sweden

Jorn Altmann

International University of Bruchsal ( email )

1 Gwanak-Ro
Seoul, 08826
Korea, Republic of (South Korea)

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