Impact of energy efficiency on CO2 Emissions: Empirical evidence from developing countries

This study decomposes energy intensity into structural and activity effects, and empirically examines their impact on CO₂ emissions in environmental Kuznets curve framework for the 30 developing countries over 1990–2016. Second generation methodological approach is adopted. The decomposed indices reflect that energy efficiency has played a key role in decreasing energy intensity, while structural shifts have caused only a minor reduction in energy intensity. The findings suggest that energy efficiency improvements have largest influence on CO₂ emissions mitigation. In developing countries as a whole, energy efficiency has positive while structural shifts have negative relation with CO₂ emissions in long run. The findings presented that energy efficiency is major contributor of CO₂ emissions reduction. While structural shifts in developing countries tend to increase CO₂ emissions because these countries are moving towards the sectors that are producing more pollution. However, the income is one of the major contributors of CO₂ emissions. While renewable energy consumption has negative and industrialization has positive impact on CO₂ emissions in developing countries. The study outcomes are utilized to develop a policy framework for attaining the SDG 7 and SDG 13 in the chosen countries.