Can green energy curb emissions? Evidence from 11 Central European and Baltic Countries

What the paper says

Purpose This study aims to investigate the relationship between carbon dioxide (CO2) emissions, energy consumption and aggregate output growth in Central European and Baltic countries, where the dynamics of eco-friendly growth remain underexplored. The objective is to provide region-specific evidence to guide sustainable energy and environmental policy formulation. Design/methodology/approach Using panel data from 11 countries over the period 1990–2020, this study applies the cross-sectionally augmented autoregressive distributed lag model to capture both short- and long-term dynamics while accounting for cross-sectional dependence and heterogeneity. Findings The results show that renewable energy consumption significantly reduces CO2 emissions, whereas nonrenewable energy use increases emissions. Aggregate output, trade openness and urbanization exert limited influence on emission reduction. At the country level, nonrenewable energy contributes to higher emissions in six countries, while renewable energy improves environmental outcomes in five countries. Practical implications The findings underscore the need for policymakers to expand renewable energy infrastructure by offering tax incentives, financial support for green technologies and fostering public–private partnerships aimed at transitioning toward low-carbon economies. Originality/value This study contributes to the scarce empirical literature on the environmental implications of energy consumption in Central and Baltic Europe by using a robust panel estimation technique and providing nuanced, country-level evidence that informs sustainable energy transition strategies in the region.