Breaking the CO2 Gridlock: Can Renewables Lead the Way for the OECD?

The use of low-carbon energy in power grids is essential for minimizing negative effects on the environment. Energy consumption causes environmental damage to the OECD’s economy. This study aims to investigate the effect of energy consumption, population, and GDP on CO2 emissions using panel data from 17 OECD countries over the period 2000–2023. We use regression approaches, such as partial least squares and principal components, to study the effects of GDP, urban and total population, oil and nuclear use, renewable energy, and industrialization on CO2 emissions. The regression process in this study reduces the data to a two-dimensional representation using a stochastic model and estimation techniques. The findings of this empirical investigation indicate that the United States, Canada, France, Germany, Italy, Korea, Mexico, and the United Kingdom exhibit higher levels of primary energy consumption in comparison to value-added sectors, renewable–geothermal energy, and nuclear energy. We determined the effects of CO2 emissions, GDP, and energy consumption by considering these as the most significant elements. This has made it possible to reduce CO2 emissions by focusing one’s attention and energy on the development of novel technologies, the use of renewable energy sources, and the execution of strategic plans. Attracting increasing attention are technological shifts that deliver enormous quantities of clean energy to combat climate change. Findings from this study can help environmentalists and policymakers better understand the role of structural change and energy consumption processes in the globalization process.