The effect of renewable energy and urbanization on CO2 emissions: A panel data

Europe has experienced fast-paced urbanization development over the past three decades. This paper empirically investigates the long-run equilibrium relationships and causal relationships among urbanization, renewable energy consumption, and CO₂ emissions, and this is important for EU countries’ future sustainable development. DOLS and FMOLS approaches are used for the period 1992–2014 .

Granger causality results show that there is a unidirectional relationship from CO₂ emissions to urbanization, and there is no causality between renewable energy consumption and CO₂ emissions. The results have important implications for EU policymakers on the path toward a sustainable society. Urbanization can have negative impacts on the natural environment with the net effect being hard in EU countries.