The impacts of renewable energy and technological innovation on environment-energy-growth nexus: New evidence from a panel quantile regression

To mitigate climate change, many studies have been conducted to identify the determinants of CO2 emissions. However, a consensus has not been reached yet on the issue because past work has often not considered the unobserved individual heterogeneity across countries. Therefore, this study revisits the environment-energy-growth nexus by employing a panel quantile regression to incorporate the effects of renewable energy consumption and technological innovation within the research background of global 30 countries over the period 1980-2014. The advantage of this method is considering the distributional heterogeneity to provide a detailed description of linkage between the CO2 emissions and driving factors at different emissions levels. The results show that the effects of determinants on CO2 emissions are heterogeneous. For high-emissions countries, the function of renewable energy consumption is limited in reducing CO2 emissions due to the smaller proportion of renewable energy use. Moreover, technological innovation greatly affects countries with relatively higher CO2 emissions. Therefore, one option is to financially support and apply technological innovations to generate renewable energy at lower costs as well as increase energy efficiency. Moreover, transforming the economic growth mode is helpful to transfer from non-renewable to renewable sources of energy to meet energy demand.