The relationship between manufacturing growth and CO2 emissions: Does renewable energy consumption matter?

• Published in: Energy (Oxford) Vol. 232; p. 121032
• Main Authors: Yang, Mian, Wang, En-Ze, Hou, Yaru
• Format: Journal Article
• Language: English
• Published: Oxford Elsevier Ltd 01.10.2021; Elsevier BV
• Subjects: Carbon dioxide; Carbon dioxide emissions; CO2 emissions; coal; Economic development; Economic growth; electricity; energy; Energy consumption; Energy policy; Finite mixture model; heat; Impact analysis; Manufacturing; Manufacturing growth; Natural gas; Renewable energy; Renewable energy consumption; renewable energy sources; Renewable resources; Manufacturing growth; Q32; Finite mixture model; CO2 emissions; Renewable energy consumption; Q42
• ISSN: 0360-5442; 1873-6785
• DOI: 10.1016/j.energy.2021.121032

Taking renewable energy consumption as a concomitant variable and using data from 25 manufacturing subsectors in 38 countries from 2000 to 2014, this paper investigates the impact of economic growth on CO2 emissions at the subsector level by employing an endogenous finite mixture model for the first time. The results are as follows: (1) Manufacturing growth has led to a significant increase of CO2 emissions, but this promoting effect becomes weak as the share of renewable energy consumption expands; (2) With the growing impact of renewable energy consumption, nearly half of the sample countries and two-thirds of the subsectors have experienced the transformation of the nexus between manufacturing growth and emissions; and (3) Compared with coal, coke and crude, the growth of the manufacturing subsector that is mainly dependent on natural gas, electricity and heat, has produced lower emissions. Our findings provide significant evidence of and references for formulating renewable energy policy for various manufacturing subsectors. •We explore the nexus between manufacturing growth (MG) and CO2 emissions (CO2).•We employ a new cross-country cross-subsector dataset.•Employing a finite mixture model with concomitant variable.•MG has led to a significant increasing in CO2.•Improvement effect of MG on CO2 becomes strong as renewable energy expands.