From Fossil Fuels to Renewables: Analyzing the Pathways to Carbon Emission Reduction in Developing Nations

Abstract

The present study endeavours to examine the determinants that contribute to the enhancement of environmental quality within specific developing economies while concurrently assessing the validity of transitioning these economies from fossil fuel dependency to renewable energy sources. To achieve this objective, panel data encompassing selected developing economies spanning the period from 2000 to 2022 has been collected from the World Development Indicators database. Fossil fuel consumption is quantified through measures of energy consumption, while renewables are gauged using indicators of renewable energy consumption and renewable electricity consumption. In terms of analytical methodology, both fixed-effect and random-effect models have been employed. The estimated coefficients from the empirical analysis reveal that energy derived from fossil fuels significantly correlates with higher carbon dioxide emissions in the selected developing countries, suggesting that a shift toward renewable energy sources and electricity consumption can serve as an effective strategy for mitigating carbon emissions. Furthermore, the findings indicate that carbon dioxide emissions may be curbed through the facilitation of international trade and the expansion of industrial activities. Conversely, greater levels of foreign direct investment (FDI) and government expenditure appear to be associated with increased carbon dioxide emissions in these developing economies. In light of these findings, it is recommended that the promotion and adoption of renewable energy sources such as solar, wind, hydropower, and geothermal energy be prioritized as a means of effectively reducing carbon emissions and fostering environmental sustainability within these developing nations.