The Impact of Natural Gas, Oil, and Renewables Consumption on Carbon Dioxide Emissions: European Evidence

Abstract

Natural gas has returned to prominence in the agenda of European countries since the beginning of the invasion of Ukraine by Russia in 2022. However, natural gas is a fossil source with severe environmental implications. This paper aims to verify the impact of natural gas on carbon dioxide (CO2) emissions for a European panel from 1993 to 2018 for sixteen countries. An Autoregressive Distributed Lag (ARDL) model in the form of an unrestricted error correction model was used to identify the short-run impacts, the long-run elasticities, and the speed of adjustment of the model. The results indicate that in the short-run, natural gas has a negligible impact on CO2 emissions when faced with oil consumption (6.7 times less), whereas the consumption of renewables and hydroelectric energy proved to be able to decrease the CO2 emissions both in the short- and long-run. The elasticity of oil consumption is lower than the unit, indicating that efficiency gains have been achieved during the process of the energy transition to clean energy sources. If economies use non-renewable energy, governments must continue to prefer natural gas to oil. Renewables and hydroelectric consumption must be used to revert the path of CO2 emissions. Given the unstable scenario that has been caused by the War in Eastern Europe, politicians should focus on accelerating the transition from fossil to renewable energies.

Oil and natural gas rents and CO2 emissions nexus in MENA: spatial analysis

“…The environmental influence of oil usage was found to be more than natural gas. Belucio et al (2022) studied Europe from 1993–2018 by using ARDL. The authors stated that both oil and natural gas usage raised CO 2 emissions.…”

A comparative study on renewable and traditional electricity: The influence of the European Union framework and the impact of COVID-19

“…This supportive framework would help to create a stable investment framework that would encourage positive investment expectations, reduce uncertainty together with a lower investor’s sensitivity to the effect of unexpected events in their stock prices and returns, as shown in our study. Given the arising strategic importance of this type of energy in view of the critical geo-political events taking place during 2022 [ 63 , 64 ] it becomes clear the need of this institutional support.…”

Comparative performance analysis of two hybrid energy systems for data centers with different replenishment energy sources

“…Crow et al [10] found that decarbonizing the upstream component of the natural gas supply chain is achievable using carbon prices similar to those needed to decarbonize the energy system as a whole. Matheus Belucio et al [11] found that in the short-run, natural gas has a negligible impact on CO2 emissions when faced with oil consumption by verifying the impact of natural gas on carbon dioxide emissions for a European panel from 1993 to 2018 for sixteen countries.…”