The long-run relationship between energy consumption, oil prices, and carbon dioxide emissions in European countries

Global climate change brings environmental quality sensitivity, especially in European countries. In this context, European countries are striving to achieve carbon neutrality by 2050. Renewable energy use can be an effective way to curtail the increasing environmental degradation. How the oil prices shape the energy use pattern and environmental quality remains unclear to date. Therefore, the present research examines the linkage between energy use (non-renewable and renewable energy), oil prices, and CO2 emissions in 30 European countries between 1997 and 2017. The study applied fully modified ordinary least squares (FMOLS), Westerlund (2007) cointegration and the Driscoll-Kraay Regression tests to explore these associations. The result of individual samples and the full sample provides the same intimations for the use of energy in Europe. The outcomes of the research ratify the existence of a long-run relationship among variables and found that non-renewable energy consumption increases CO2 emissions, while renewable energy consumption mitigates CO2 emissions. Furthermore, when the oil prices rise, people switch towards substitute energy sources that reduce CO2 emissions. Based on the results, the study suggests that European countries should increase the share of renewable energy, promote the use of clean energy resources, and discourage fossil fuel energy consumption to ensure sustainability.

Automated summary

European countries are striving to achieve carbon neutrality by 2050, with an emphasis on increasing the use of renewable energy to reduce CO2 emissions. The research found that non-renewable energy consumption increases CO2 emissions while renewable energy consumption mitigates CO2 emissions. Additionally, rising oil prices lead to a shift towards alternative energy sources that decrease CO2 emissions.