Residential energy environmental Kuznets curve in emerging economies: the role of economic growth, renewable energy consumption, and financial development.

Abstract

The aim of the present paper is to determine residential energy environmental Kuznets curve (EKC) in Next-11 and BRICS countries with the specific consideration on the role of economic growth, renewable energy consumption, and financial development from an era of 1990-2015. In order to determine the cross-section independence and to control the heterogeneity between cross-sections in the paper, we have applied unique and advanced techniques of econometrics panel data. Moreover, the following tests have been applied which are the CIPS unit root test, co-integration test, fully modified ordinary least square (FMOLS), and heterogeneous panel causality technique. The outcomes revealed that in the long run, all the variables are co-integrated. Moreover, there is a significant and positive influence of residential energy consumption, economic growth, and financial development on environmental degradation. However, in the reduction of carbon dioxide (CO2) emissions, essential role is performed by renewable energy. On the other hand, findings show great support for the residential energy EKC hypothesis in emerging countries.