The relationship between manufacturing growth and CO2 emissions: Does renewable energy consumption matter?

Taking renewable energy consumption as a concomitant variable and using data from 25 manufacturing subsectors in 38 countries from 2000 to 2014, this paper investigates the impact of economic growth on CO2 emissions at the subsector level by employing an endogenous finite mixture model for the first time. The results are as follows: (1) Manufacturing growth has led to a significant increase of CO2 emissions, but this promoting effect becomes weak as the share of renewable energy consumption expands; (2) With the growing impact of renewable energy consumption, nearly half of the sample countries and two-thirds of the subsectors have experienced the transformation of the nexus between manufacturing growth and emissions; and (3) Compared with coal, coke and crude, the growth of the manufacturing subsector that is mainly dependent on natural gas, electricity and heat, has produced lower emissions. Our findings provide significant evidence of and references for formulating renewable energy policy for various manufacturing subsectors. (C) 2021 Elsevier Ltd. All rights reserved.

Automated summary

The research found that manufacturing growth leads to a significant increase in CO2 emissions, but this effect weakens as renewable energy consumption expands; Most sample countries and subsectors have experienced a transformation in the relationship between manufacturing growth and emissions; Compared to coal, coke, and crude, manufacturing subsectors dependent on natural gas, electricity, and heat have lower emissions.