Examining the roles of renewable energy consumption and agriculture on CO2 emission in lucky-seven countries

Abstract

Environmental degradation has become an important global issue due to the extraordinary increase in greenhouse gas emissions in recent years. Therefore, identifying the main determinants of environmental degradation is one of the primary agenda items of researchers and policymakers. In the literature, many social, economic, and sectorial factors related to the main determinants of CO2 emissions have been studied. Although these studies provide very important information about the causes of CO2 emissions and environmental degradation, some deficiencies remain in the related literature. The agricultural sector activities, which are an important sector at a global level and have significant potential impacts on CO2 emissions, have not been adequately studied. In order to fill this gap, the effects of agriculture and renewable energy on CO2 emissions were examined for lucky-seven countries during the period 1995–2014. The results of panel cointegration reveal the presence of long-run nexus among the variables. While the findings indicate that agriculture increases CO2 emissions, renewable energy is a very important catalyst in reducing CO2 emissions in lucky-seven countries. We also found that economic growth and energy consumption enhance CO2 emissions and trade openness decreases. Panel VECM results indicate that variables are the causes of CO2 emission in the long run. Also, we find that economic growth is the cause of CO2 emissions in the short run.