Nexus of economic policy uncertainty, economic expansion and clean energy consumption and their role in carbon neutrality of emerging economies

Abstract

Energy is unquestionably necessary for economic progress, but it also results in carbon emissions, which are the leading cause of environmental deterioration and climate change. From this perspective, clean energy can contribute to both sustainable development and ecological sustainability, as it consists of non-carbohydrate energy sources that do not or rarely emit greenhouse gases. In this context, this paper investigates economic policy uncertainty (EPU), economic expansion (EE) and clean energy consumption (EC) on carbon dioxide (CO2) emissions in Russia from 1995 to 2021. The autoregressive distributed lag (ARDL) model was used to illustrate the interdependence of factors. The error correction model (ECM) is also used to check the relationship among the study's desired factors. The long-term investigation found that EPU harms the environment by increasing emission levels. The economic expansion increases CO2 emissions and reduces the environmental quality, supporting the ecological modernization argument. The consumption of clean energy negatively impacts CO2 emission; hence its higher amount reduces the carbon. Thus, the study found a causal relationship between EPU, EC, EE and CO2 emissions. Based on the study's findings, a policy framework is proposed to address the sustainable development goals and environmental quality. Adding the other variables like environmental regulations can be taken as future direction.