Renewable Energy and CO2 Emissions: Evidence from Rapidly Urbanizing Countries

This study explores the relationship between renewable energy consumption and carbon dioxide emissions focusing on most rapidly urbanizing countries which has been overlooked in the empirical research. This study also investigates the presence of the Environmental Kuznets curve relationship between income and carbon emissions. Using two-step system GMM estimator for the years 2000–2015, we find that renewable energy reduces carbon dioxide emissions. Moreover, we document that quality of institutions mediates the relationship between renewables and environmental degradation. The important policy implications are discussed.