The Significance of Economic Complexity and Renewable Energy for Decarbonization in Eastern European Countries

Emerging states’ path to enhancing the welfare of their citizens has been strongly accompanied by environmental degradation; climate change effects often abrogate their economic results. This zero-sum game must change, and environmental concerns should be considered when the development of a country is discussed and assessed. In this sense, this study’s objective is to analyze the impact of economic complexity and renewable energy consumption in the presence of economic growth and urbanization in selected emerging European countries from 1995 to 2021. We used a multiple-methodologic approach to highlight the supportive effects of economic complexity and renewable energy consumption in mitigating carbon emissions. Furthermore, the effects of economic growth and urbanization were emphasized by applying the cointegration regression (CCR), fully modified OLS, and dynamic OLS (FMOLS–DOLS) approaches. Additionally, we used Driscoll–Kraay estimation regression to test the robustness of our results. The results reveal the beneficial role of renewable energy consumption and economic complexity in the decarbonization process of selected countries. Furthermore, the study highlighted the detrimental influence of urbanization and economic growth, which were feasible considering the emerging status of the countries included in the panel.