The influence of GDP, FDI, innovation and renewable energy factors on CO2 emissions: the case of selected countries

Abstract

The rapid development of scientific and technological progress today has had a detrimental impact on the environment. Environmental degradation is becoming an increasingly serious issue in many regions. In the pursuit of sustainable economic development, numerous governments around the world have endeavored to reduce environmental pollution and carbon dioxide (CO2) emissions. The author group conducts this study to understand the relationship between renewable energy consumption, economic growth, foreign direct investment (FDI), and innovation with CO2 emissions. A dataset comprising 82 countries committed to achieving net-zero emissions, during the period from 2000 to 2022, has been analyzed. The authors employ OLS, FEM, REM regression analyses and utilize FGLS to address model deficiencies. The results of the final regression indicate an inverse correlation between renewable energy consumption and CO2 emissions, while economic growth exhibits a positive relationship with CO2 emissions. The research findings provide significant policy implications for governments aiming to reduce CO2 emissions through the utilization of renewable energy. Additionally, the results highlight the substantial impact of economic development on environmental degradation through CO2 emissions.