The Relationship between Green Innovation, CO2 Emissions, Gross Domestic Product, and Renewable Energy Supply: A Panel Data Analysis for BRICS Countries and Turkey

Year 2022, , 237 - 256, 01.05.2022

Bekir Sami Oguzturk , Ferhat Özbay

https://doi.org/10.26650/ibr.2022.51.969130

Abstract

This study aims to determine the impact of carbon dioxide (CO2) emissions, Gross Domestic Product (GDP), and green innovation on the renewable energy (RE) supply (RES) by taking panel heterogeneity and cross-section dependence into account. The dataset of this study covers a panel of BRICS countries (fragile five) and Turkey from 2000 to 2017. Based on the heterogeneity and cross-section dependency, the tests we have applied are the CIPS unit root test, Gengenbach, Urbai and Westerlund’s (2016) panel cointegration, Mean Group estimator (MG) and fully modified ordinary least squares (FMOLS), and Panel Dumitrescu and Hurlin’s (2012) causality techniques. We have found in this study that the variables are cointegrated in the long term. The results show that the CO2 emission for the whole sample has a negative impact on RES. On a country basis, it shows that green innovation has a positive and robust relationship with RES in Brazil and Turkey. The impact of green innovation on RES does not have a statistically significant relationship in Russia, China, India, or South Africa. CO2 emission indicates a negative impact on RES in whole countries. While economic growth reduces RES in India, Turkey and South Africa, this effect is the opposite in Brazil and China. This study provides practical policy implications for policymakers and researchers studying in this field.

Keywords

Green Innovation, Renewable Energy, CO2 emissions, Environment, Panel Cointegration

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