The Effects of Renewable and Non-renewable Energy Consumption and Economic Growth on CO2 Emissions: Empirical Evidence from Developing Countries

This study examines the effects of renewable and non-renewable energy consumption and economic growth on CO2 emissions for 53 developing countries during the period 1990-2014. For this purpose, the study employs a two-step difference Generalized Method of Moments (GMM) approach. Empirical results show that there is an inverted U-shaped relationship between economic growth and CO2 emissions, which shows the validity of the environmental Kuznets curve (EKC) hypothesis. The effect of renewable energy consumption (REC) on CO2 emissions was found to be negative and significant, while the effect of non-renewable energy consumption (NREC) was positive and significant. Moreover, both renewable and non-renewable energy consumption positively affect economic growth. Thus, for developing countries aiming to reduce CO2 emissions and the consequent environmental pollution, it is necessary to reduce the share of NREC in total energy consumption and to increase the share of REC. Furthermore, because NREC positively affects economic growth, the efficiency of non-renewable energy resources should be increased in order not to damage the economic growth process while decreasing the use.