Abstract:

One of the main reasons for the increasing climate change in the world is the "increase of carbon emissions". Although the traditional determinants of carbon emissions are widely researched in the literature, the possible effects of financial development, renewable energy and income inequality on these emissions are less discussed. In this context, the main purpose of the study is to investigate the determinants of carbon emissions for selected European Union countries in the period of 1991-2018 using the spatial panel data method. In the study, after controlling for the effects of other control variables (urbanization and growth), it is concluded that carbon emissions increase as income inequality and financial development increase, while these emissions decrease or environmental quality improves as renewable energy consumption increases. In addition, the "environmental Kuznets curve" hypothesis, which is based on the idea that carbon emissions will increase up to a certain threshold value and then decrease as the growth rate increases, seems to be valid. These results reveal that the reduction of climate change as well as carbon emissions for selected European Union countries depends on policies that will support renewable energy. Thus, shifts from carbon-intensive coal to low-carbon gas, or from fossil fuels to nuclear or renewable energy can reduce the level of overall global emissions.

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