R&D Human Capital, Renewable Energy and CO2 Emissions: Evidence from 26 Countries

Abstract

This study examines the long-term relationship between carbon emissions and a number of researchers engaged in Research and Development (R&D), economic development, foreign capital inflows, renewable energy and population growth in 26 countries between 1995 and 2015. Pedroni’s panel cointegration test confirms the cointegrating relationship between the variables. Long-term elasticities are derived from FMOLS regression. Researchers in R&D and renewable energy are negatively and significantly related to carbon emissions. There is a positive and significant long-term relationship between GDPs per capita and CO2 and between the FDI and CO2. Dumitrescu and Hurlin’s panel causality test revealed unidirectional causality running from economic development to carbon emissions and feedback hypotheses between the FDI and CO2 and between renewable energy and CO2.