Exploring the Nexus between Greenhouse Emissions, Environmental Degradation and Green Energy in Europe: A Critique of the Environmental Kuznets Curve

Abstract

This study examines the intricate relationship between economic growth and European environmental degradation via the Environmental Kuznets Curve (EKC). Our results contest the traditional inverted U-shape model of the Environmental Kuznets Curve, indicating that the theory may not be consistently applicable across European countries. Utilizing CS-ARDL and MMQR modelling, we reveal substantial regional disparities. Western European nations demonstrate a typical Environmental Kuznets Curve (EKC) pattern in the short term, characterized by an initial increase in emissions alongside GDP development, followed by a subsequent fall. Conversely, Eastern and Balkan nations exhibit a U-shaped connection, described by an early decline in emissions followed by a subsequent increase as their development levels increase. The influence of renewable energy differs, as it decreases emissions in the short term in Western Europe. However, its long-term impacts are variable, especially when contrasted with its more pronounced effect on emissions in Eastern and Balkan countries. Furthermore, trade openness intensifies environmental degradation in the short-term across all regions, although its long-term impact diminishes, particularly concerning greenhouse gases (GHG). The relationship between renewable energy and trade openness is substantial for the short-term reduction of carbon dioxide emissions, but this effect declines with time. The results indicate that a uniform environmental policy throughout Europe may lack efficacy. Customized strategies to expedite the transition in Western Europe and more specific interventions in Eastern Europe are essential to harmonize economic progress with environmental sustainability. Future research should examine the determinants of the diminishing long-term effects of renewable energy and the interplay between trade and environmental policies.

Keywords

• greenhouse gas emissions
• environmental degradation
• Kuznets Curve
• green energy
• alternative energy
• economic development