The race to zero emissions: Can renewable energy be the path to carbon neutrality?

Abstract

When taking into account the general terms on which the global green and low-carbon transition takes place, it can be affirmed that the use of clean and renewable energy, including wind, hydro, solar, etc., is an alternative to the traditional energy sources. The renewable energy industry possesses considerable potential, and has recently become the centre of the global energy landscape. Therefore, this article refers to the rolling-window Granger causality test, in order to explore the role of renewable energy (RE) in reducing the greenhouse gas emissions. By studying the interactions that take place between RE consumption and carbon dioxide (CO₂) emissions, we find that the negative impact of RE on CO₂ indicates that the replacement role of RE has become increasingly prominent, for it to effectively contribute towards the realization of carbon emission reduction. The results in this regard are consistent with the energy-environment model, suggesting that RE has an excellent performance in achieving carbon neutrality. In fact, CO₂ usually exhibits a negative effect on RE, which indicates towards the predictability of environmental quality to the development potential of renewable energy. Carbon emission reduction has become a game of interest among the countries around the world. And hence, in relation to these turn of events in the last few decades, RE is now expected to usher in the required acceleration. While eventually it is believed that the green energy competition will reshape the geopolitics of the world.

Keywords: Carbon emission reduction; Carbon neutrality; Causal relationship; Renewable energy.