Economic Growth and Pollution Nexus in Mexico, Colombia, and Venezuela (G-3 Countries): The Role of Renewable Energy in Carbon Dioxide Emissions

Abstract

The primary aspiration of this paper is to learn about the effects of economic growth (GDPG) and energy consumption (ENRC) on environmental pollution (EP) in G-3 countries and to show the significance of renewable energy consumption (RENEW) on environmental pollution (EP). The data covers the period from 1970 to 2020 by applying the “Pooled Mean Group-Autoregressive Distributed Lag” (PMG-ARDL) model. The results indicate that GDPG is negatively co-integrated with CO2 emissions (pollution) in the short run (SR) but positively co-integrated in the long run (LR). Energy consumption has a positive impact in the long run, but there is no positive impact in the short run to accelerate pollution. In both the short and long run, renewable energy has a significant role in reducing environmental degradation. However, according to the Dumitrescu Hurlin panel, there was bidirectional causality (BC) involving energy consumption and pollution. Because of the large volume of energy emphasized in economic growth and development activities, energy use increases pollution. In addition, there was a BC involving energy consumption and economic growth. At the country level, a significant contribution implies sustainable development and the implication of environmental quality assurance policies.