Energy is considered to be the backbone of an economy, and its contribution to economic growth is self-contradictory. However, rising economic growth leads to increased production of goods and services and, ultimately, energy demand increases. Most countries depend on fossil fuel that is mostly imported to sustain current energy production and to fulfill energy requirements. Fluctuations in fossil fuel and energy prices lead to increasing environmental problems (Fatima, Xia, and Ahad 2019). Therefore, most countries are interested in policies that focus on minimizing their dependency on fossil fuel; consequently, the environmental pressure would decrease. For this purpose, the basic priority should be to increase the share of renewable energy within the energy mix to minimize environmental issues.
Our study provides the first valuation to explore the heterogeneous impacts of energy (renewable and nonrenewable) and trade openness on the rising level of carbon emissions for leading carbon emitter countries.
Fatima and her colleagues analyze the role of renewable and nonrenewable energy in relation to the rising level of carbon emissions in the leading emitting countries. They further examine the heterogeneous impacts of rising income levels and EKC investigation for CO2 emissions. The Kao cointegration, generalized method of moments (GMM), random effects, fixed effect (FE) regression models, and panel causality techniques are employed for panel data estimations. The empirical outcomes mention that an increase in income moderates the ratio of consumption of renewable energy to CO2 emissions. Increased income contributes more to the energy mix, which contributes to environmental pollution, through nonrenewable energy. This research reports policy-relevant critical masses beyond which an increase in income negatively affects the link between renewable energy and CO2 emissions. Our results found that an increase in income moderates the ratio of consumption of renewable energy to CO2 emissions. Increased income contributes more to the energy mix, which contributes to environmental pollution, through nonrenewable energy. Sustainable development and cleaner growth is a matter of critical importance for the sample countries (especially for China, Brazil, Canada, the United States, India), as these economies have long-term economic goals. At the same time, environmental pollution might act as a barrier to achieving sustainable development goals. The researcher points out that The high-emission countries should implement strategic investment and allocate more research and development funding to the production of renewable energy.