Exploring the Role of Fossil Fuels and Renewable Energy in Determining Environmental Sustainability: Evidence from OECD Countries

Global warming has become a major concern for countries around the world. In this context, developed countries have decided to reduce global emissions to achieve sustainable development. The energy mix of OECD countries consists of 80% fossil fuels and accounts for about 35% of worldwide carbon emissions. Therefore, it is important to analyze how environmental factors affect carbon emissions in OECD countries. This study uses fossil energy, renewable energy (RE), and GDP for the period 1990-2019. Unlike previous studies, we will estimate two separate models for FFE and RE. To evaluate the empirical results, advanced panel data estimation methods using the cointegration test and the CS-ARDL estimation technique are employed to examine the long-run relationship between the variables. The results of the study demonstrate that fossil fuel use and GDP increase carbon emissions both in the short and long term. However, the use of RE hurts carbon emissions and is associated with sustainable development in OECD countries. Therefore, it is assumed that although fossil fuel use degrades the environment, economic growth helps it by reducing carbon emissions. Overall, our study shows that the use of RE is essential for OECD countries to achieve their environmental sustainability goals because it reduces the share of fossil fuels in the overall energy mix. Furthermore, in order to achieve a sustainable environment, OECD countries are recommended to begin long-term planning to reduce carbon emissions.

Automated summary

Global warming has become a major concern, leading developed countries to reduce global emissions for sustainable development. OECD countries heavily rely on fossil fuels for 80% of their energy mix, contributing to 35% of global carbon emissions. This study examines the impact of environmental factors on carbon emissions in OECD countries using fossil energy, renewable energy (RE), and GDP data from 1990 to 2019. The results show that while fossil fuel use and GDP increase carbon emissions in both short and long term, the use of RE has a positive effect on sustainable development by reducing carbon emissions. Therefore, promoting the use of RE is crucial for OECD countries to achieve their environmental sustainability goals.