A link between renewable energy, globalisation and carbon emission? Evidence from a disaggregate analysis with policy insights

Abstract This study unveils the question of how renewable energy, non-renewable energy, globalisation, and total factor productivity affect the carbon dioxide (CO2) at the aggregate and disaggregate levels (CO2 from oil, coal and gas) in case of top ten carbon emitters developing economies over the period 1991–2016. To achieve the above objective, we apply various panel unit, cointegration and causality tests. We also implement a Pooled Mean Group estimator technique to find the long-term coefficients. Findings from panel cointegration tests show that there exists a significant long-run relationship between renewable energy, non-renewable energy, globalisation, total factor productivity and CO2. Moreover, findings derived from PMG infers that renewable energy consumption has a negative and significant impact on CO2 while non-renewable energy consumption significantly increases the CO2 at aggregate and disaggregate level. Further, our results show that total factor productivity increases the CO2 emissions whereas globalisation decreases it. From the policy point of view, our findings recommend that CO2 in sample countries can be reduced through promoting low carbon technology, and globalisation. Moreover, our findings propose to encourage renewable energy installation and drafting comprehensive policies.