Abstract:

The study examine the relationship between renewable and non-renewable energy consumption, trade openness, urbanization on CO₂ emission over the period of 1980-2014 for top emitting countries by employing panel estimation technique robust to cross-sectional dependency test. By applying dynamic OLS (DOLS) we find that renewable energy consumption mitigates carbon emission while trade openness, non-renewable energy consumption and urbanization increase carbon emission. The Dumitresu-Hurlin non-causality test approach indicates that there is unidirectional causality between renewable energy consumption and carbon emission, from trade openness to level of emission, from income to non-renewable energy consumption and bidirectional causality from trade openness to non-renewable energy. Therefore, the overall evidence suggest that policy maker should focus on renewable energy sources as a clean energy development as to make switch from non-renewable to renewable energy use to mitigate emission.