The dynamic relationship of renewable and nonrenewable energy consumption with carbon emission: A global study with the application of heterogeneous panel estimations
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This present study explores the relationship of renewable and non-renewable energy consumption with carbon emission by using panel data of 74 nations from 1990 to 2015. In doing as so, we apply the second-generation econometrics of panel data to examines the cross-section independence and control the heterogeneity between cross-sections. The CIPS unit root test, Westerlund (2007) bootstrap cointegration, Pedroni co-integration, FMOLS and heterogeneous panel causality techniques have been applied. The outcomes affirm that all variables are integrated over the long-run. The results also show that the nonrenewable energy consumption has a positive effect on environmental degradation whereas; renewable energy has a negative impact on environmental degradation and help to reduce environmental hazards. Similarly, financial development also has a negative and significant impact on environmental degradation. Furthermore, the Kuznets hypothesis are also tested and found its existence. This study provides valuable policy implications for the government and the policy makers.