Analyzing the linkage between public debt,renewable electricity output,and CO 2 emissions in emerging economies: Does the N-shaped environmental Kuznets curve exist?

Abstract

The main objective of the current study is to analyze the nexus between public debt, renewable electricity, economic growth, and carbon dioxide (CO₂) emissions in emerging economies between 1990 and 2020. The augmented mean group (AMG), fully modified ordinary least square (FMOLS), and dynamic ordinary least square (DOLS) models have been applied to analyze the long-run estimation. The empirical evidence demonstrates that public debt, renewable electricity reduces CO₂ emissions. Furthermore, an N-shaped relationship has been identified between per capita CO₂ emissions and per capita GDP in emerging nations. Also, the result reveals a bidirectional causal relationship between public debt and economic growth, CO₂ emissions and economic growth, public debt and CO₂ emissions, and renewable electricity and economic growth. The current study recommends promoting the renewable energy transition, elevating renewable electricity generation capacities, and ensuring greener economic growth by emitting carbon dioxide emissions across emerging countries. The government across each region could incorporate taxes and other incentives to encourage entrepreneurs and citizens to produce equipment that reduces carbon intensity and is ecologically friendly.