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The long-run relationship between energy consumption, oil prices, and carbon dioxide emissions in European countries

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Abstract

Global climate change brings environmental quality sensitivity, especially in European countries. In this context, European countries are striving to achieve carbon neutrality by 2050. Renewable energy use can be an effective way to curtail the increasing environmental degradation. How the oil prices shape the energy use pattern and environmental quality remains unclear to date. Therefore, the present research examines the linkage between energy use (non-renewable and renewable energy), oil prices, and CO2 emissions in 30 European countries between 1997 and 2017. The study applied fully modified ordinary least squares (FMOLS), Westerlund (2007) cointegration and the Driscoll-Kraay Regression tests to explore these associations. The result of individual samples and the full sample provides the same intimations for the use of energy in Europe. The outcomes of the research ratify the existence of a long-run relationship among variables and found that non-renewable energy consumption increases CO2 emissions, while renewable energy consumption mitigates CO2 emissions. Furthermore, when the oil prices rise, people switch towards substitute energy sources that reduce CO2 emissions. Based on the results, the study suggests that European countries should increase the share of renewable energy, promote the use of clean energy resources, and discourage fossil fuel energy consumption to ensure sustainability.

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Funding

This research work is funded by ILMA University under the ILMA Research Publication Grant.

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Authors and Affiliations

  1. School of Management and Economics, Beijing Institute of Technology, Beijing, 100081, China

    Muhammad Qamar Rasheed & Zahoor Ahmed

  2. Department of Management Sciences, The University of Haripur, Haripur, Pakistan

    Abdul Haseeb

  3. Department of Business Administration, Faculty of Economics and Administrative Science, Cyprus International University, 99040, Nicosia, Turkey

    Tomiwa Sunday Adebayo

  4. Department of Finance & Accounting, Akfa University, 1st Deadlock, 10th Kukcha Darvoza Street, Tashkent, Uzbekistan

    Tomiwa Sunday Adebayo

  5. Department of Business Administration, Faculty of Management Sciences, ILMA University, Karachi, Pakistan

    Zahoor Ahmed

  6. Business School, Shandong University of Technology, Zibo, 255000, China

    Mahmood Ahmad

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  1. Muhammad Qamar Rasheed
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  2. Abdul Haseeb
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  3. Tomiwa Sunday Adebayo
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  4. Zahoor Ahmed
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  5. Mahmood Ahmad
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Contributions

MQR, and AH: Conceptualization, data collection, empirical analysis, writing original manuscript. TSA: Methodology, formal analysis, revision, editing, writing original manuscript. ZA: Editing, proofreading, comments, revision, contributed in analysis. MA: Writing review and editing, proofreading. All authors approved the final manuscript.

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Correspondence to Tomiwa Sunday Adebayo or Zahoor Ahmed.

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Table 8 Augmented Dickey-Fuller unit root results for European countries
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Rasheed, M.Q., Haseeb, A., Adebayo, T.S. et al. The long-run relationship between energy consumption, oil prices, and carbon dioxide emissions in European countries. Environ Sci Pollut Res 29, 24234–24247 (2022). https://doi.org/10.1007/s11356-021-17601-4

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