Evaluating the Impact of Renewable Energy Transition on Environmental Sustainability: Evidence Using Quantile Regression

Abstract

This study aims to analyze the impact of transitioning from traditional fossil fuel-based energy systems to renewable energy systems on promoting the green economy and sustainable development in industrial countries. Second-generation techniques for dynamic panel estimation, including Quantile Regression (MMQR) and Causality Tests (Dumitrescu & Hurlin, 2012), were used to analyze data from 29 industrial countries for the period 1990-2021. The results showed that increasing the use of renewable energy significantly reduces the environmental footprint, thus enhancing environmental sustainability. However, the effect was less pronounced at higher quantiles due to technological saturation, the intensity of economic activities, and infrastructural complexities. The study also found that economic growth increases the environmental footprint, while higher levels of education and trade openness contribute to its reduction. The study recommends adopting comprehensive policies that encourage the use of renewable energy, improve energy infrastructure, and enhance education to achieve a balance between economic growth and environmental protection, contributing to sustainable development and the green economy in industrial countries.