Evaluating the role of renewable energy, economic growth and agriculture on CO2 emission in E7 countries

Abstract

This study examines the dynamic links between per capita CO2 emission, economic growth, agricultural value added, renewable and non-renewable energy consumption and investigates the existence of Environmental Kuznets Curve (EKC) hypothesis for a panel of E7 countries spanning the period 1990-2014. The estimates indicate that there is a positive relationship between CO2 emissions and real GDP, non-renewable energy consumption and agricultural value added in the long run, whereas a negative relationship is represented between CO2 emissions and square of real GDP and renewable energy consumption. The results of long-run estimates support the inverted U-shape EKC in these selected countries. Regarding the Granger causality analysis, bi-directional Granger causality exists between non-renewable energy consumption and CO2 emissions in the long run. In regards policy implications and recommendations, E7 countries should keep on increasing the share of renewable energy for the sake of growth purposes in the agricultural sector, thereby reducing fossil energy consumption for environmental improvements.