Energy consumption, economic growth and CO2 Emissions: Empirical evidence for EU countries
Energy consumption, economic growth and CO2 Emissions: Empirical evidence for EU countries

Summary/Abstract: This paper explores the relationship between economic growth, energy consumption (from fossil fuels and renewable sources), and CO2 emissions in the EU, highlighting the causal relationships between these variables. Through a Panel Vector Autoregressive (VAR) model and statistical test, it is found that fossil fuel consumption has a strong positive effect on CO2 emissions, while renewable energy has a milder negative effect. Granger causality tests confirm the significant causal relationship between fossil fuel consumption and CO2 emissions, highlight the positive impact of renewables on economic growth, showcase the link between economic growth and both emissions growth and renewable energy consumption. The findings emphasize the urgent need for a more aggressive shift towards renewable energy and enhanced energy efficiency to meet the EU's climate neutrality objectives. This study contributes critical insights for policymakers, emphasizing the importance of balancing economic growth with environmental sustainability by accelerating the transition to cleaner energy sources.

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