Short- and long-run influence of energy utilization and economic growth on carbon discharge in emerging SREB economies

Abstract This work highlights the impact of renewable and non-renewable energy, capital formation, and economic growth on CO2 emissions in the economies that are emerging due to China’s Silk Road Economic Belt (SREB) initiative. In this context, data for 24 SREB economies from 1995 to 2014 are analyzed through the Autoregressive Distributed Lag (ARDL) approach. The results suggest that using a high share of renewable energy to execute economic activities and improve the level of capital formation significantly decreases the rate of CO2 emissions in both the long term and short term in the considered SREB countries. The presence of the Environmental Kuznets Curve and the existence of an inverted U-shaped relationship between economic growth and CO2 emissions are also determined. The negative impact of Gross Capital Formation (GCF) and the negligible effects of trade openness on CO2 discharge are also observed. The negative effect of GCF on carbon emissions suggests either that the SREB economies are investing in low-carbon economic activities or simply that those assets are being produced using cleaner energy sources. It is suggested that these countries should pay more attention to renewable energy resources to improve the environment and maximize the economic benefits of the SREB initiative.