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Do natural resource volatilities and renewable energy contribute to the environment and economic performance? Empirical evidence from E7 economies

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Abstract

The economies of the emerging seven (E7) are not insulated from the climate change challenges, which is a key concern for most countries. The E7 nations have undertaken part in initiatives to combat climate change, particularly in terms of reducing CO2 emissions from the trajectory of productivity expansion in their countries. It is for this reason that this study examines the impact of resource volatility, renewable energy, and fossil fuel on both economic performance and CO2 emission from 1990 to 2018. The present study used panel quantile regression and Driscoll-Kraay fixed effect-OLS estimators to examine these associations. From model I, the outcome shows that economic performance, natural gas rent, coal rent, and fossil fuel impact CO2 emission positively. Moreover, oil rent, renewable energy, investment in energy, and the interaction between investment in energy and renewable energy also negatively and significantly impact CO2 emission. On the other hand, model II which has economic performance as a dependent variable shows that all the understudy variables have significant positive relations with economic performance. Based on the empirical outcome, policy ramifications are provided.

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Notes

  1. https://www.weforum.org/agenda/2020/01/energy-transition-private-sector-climate/

  2. https://www.weforum.org/agenda/2015/04/how-to-increase-investment-in-energy-efficiency/

  3. https://globalsecurityreview.com/acheiving-sustainable-economic-growth-e7/

Abbreviations

E7:

Emerging seven

G7:

Group of seven

FMOLS:

Fully modified least square

ARDL:

Autoregressive distributed lag model

FDI:

Foreign direct investment

QQ:

Quantile on quantile regression

MMQR:

Moment of moment quantile regression

CS-ARDL:

Cross-sectional Autoregressive distributed lag model

DOLS:

Dynamic ordinal least square

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Authors and Affiliations

  1. Economic and Finance Application and Research Center, İstanbul Ticaret University, İstanbul, Turkey

    Bright Akwasi Gyamfi

  2. Faculty of Economics and Administrative Science, Department of Economics, Cyprus International University, 99040, Nicosia, North Cyprus, Turkey

    Tomiwa Sunday Adebayo

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  1. Bright Akwasi Gyamfi
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Contributions

The first author Dr, Bright Akwasi Gyamfi was responsible for the conceptual construction of the study’s idea, managed the data gathering and preliminary analysis, and was responsible for proofreading and manuscript editing. The second author Dr. Tomiwa Sunday Adebayo handled the introduction, and the literature section managed the data gathering, and preliminary analysis, and was responsible for proofreading and manuscript editing. For blinded copy’s sake. A list of authorship contributions is appended in a separate file. All authors have contributed equally as well as approved the final version.

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Correspondence to Bright Akwasi Gyamfi.

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Highlights

• The study investigates the effect of natural resources volatilities and renewable energy on both environmental and economic performance.

• Natural gas rent and coal rent have positive impact on environmental degradation.

• Renewable energy consumption impact CO2 emissions negatively.

• All the variables impact economic performance positively.

• To reduce CO2 emission, the E7 economics should shift to renewable energy consumption.

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Gyamfi, B.A., Adebayo, T.S. Do natural resource volatilities and renewable energy contribute to the environment and economic performance? Empirical evidence from E7 economies. Environ Sci Pollut Res 30, 19380–19392 (2023). https://doi.org/10.1007/s11356-022-23457-z

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