The role of interaction effect between renewable energy consumption and real income in carbon emissions: Evidence from low-income countries
Özet
Even though the existing studies have extensively investigated the impacts of renewable energy and real income
on carbon emissions, the literature overlooks the role of their interaction effect in the level of emissions. In
addition, the studies have usually chosen high-income and middle-income countries as focused group. To fill
these gaps in the existing body of energy-environment literature, this study investigates the impacts of real income, renewable energy consumption and their interaction effect on carbon emissions in low-income countries
by employing empirical estimations that control different econometric and economic issues such as heterogeneity
and cross-sectional dependence. The results reveal that renewable energy mitigates emissions; however, the
interaction effect stays positive. The marginal effect of renewable energy on emissions varies with the levels of
real income. Policymakers in these economies should implement policies and regulations to promote the
adoption and use of renewable energy to mitigate carbon emissions. Besides, this study emphasizes that the levels
of renewable energy and real income are not the only panacea to abating pollution, but the interaction effect
should be considered in ensuring environmental sustainability.
