CO2 Emission, Renewable Energy Consumption, and Green Growth in Developing Countries

Abstract

Green growth is an economic development model that encourages growth by ensuring natural assets provide the resources and environmental services indispensable for welfare. It emphasizes low-carbon, resource-efficient, and socially inclusive approaches, aiming to boost GDP, reduce poverty, and prevent environmental degradation. Renewable energy is a foundation stone of green growth, transforming economic development by balancing industrial progress with environmental sustainability. For this, we have examined the effect of CO2 emission, renewable energy consumption, financial development index, trade openness, and inflation on green growth by using data from 1996 to 2023 from eight developing countries. Random effect results show the negative relationship between CO2 emissions and green growth. The results also show that renewable energy consumption and trade openness increase green growth in these countries. Finally, it is found that financial development and inflation tend to decrease green growth. The existing research recommends clean energy usage and reducing CO2 emissions. Focus should be made on promoting domestic production, exports, and trade openness. There is a need to emphasize economic growth by making investments in new technologies, creating high-quality jobs, and lowering energy costs while reducing pollution. Finally, it is necessary to use renewable energy sources for reduced pollution and for high green growth.