Renewable energy consumption and carbon emissions in developing economies: Panel data analysis (2000–2022)
Renewable energy consumption and carbon emissions in developing economies: Panel data analysis (2000–2022)

Summary/Abstract: This study examines the relationship between renewable energy consumption and carbon dioxide (CO2) emissions in developing economies from 2000 to 2022. Using panel data from the World Bank, the analysis includes renewable energy share, GDP per capita, population growth, and a financial development index. Three panel data models—Pooled Regression Model (PRM), Fixed Effects Model (FEM), and Random Effects Model (REM)—are estimated, with Fisher, Breusch–Pagan LM, and Hausman tests applied to select the most suitable model. The Random Effects Model (REM) provides the best fit. Results show that higher renewable energy consumption reduces (CO2) emissions, while economic growth, population expansion, and financial development increase emissions. These findings are consistent with the Environmental Kuznets Curve (EKC), suggesting emissions rise in early development stages and decline as institutions strengthen and cleaner technologies are adopted. The study highlights policy implications for green financing, institutional reforms, and regional cooperation to support sustainable energy transitions in developing countries.

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