Determinants of CO₂ emissions in Central and Eastern Europe: An empirical panel data analysis

This paper investigates the impact of GDP growth, regulatory quality, electricity consumption, human development, and research and development (R&D) expenditures on carbon dioxide emissions (CO2) in 15 Central and Eastern European (CEE) countries over the period 2002-2020. A three-step empirical strategy is employed, beginning with the specification of a panel data model, followed by diagnostic testing of model residuals, and concluding with the application of multiple panel estimators to ensure robustness of the results. The findings reveal that, with the exception of the Human Development Index (HDI), all other variables show statistically significant associations with CO₂ emissions. In particular, real GDP per capita growth has a strong and consistent positive effect: a one-percentage-point increase in GDP per capita is associated with a rise in CO₂ emissions per capita by approximately 0.3 to 0.35 tons. These results underscore the environmental cost of economic expansion in the region and highlight the critical role of regulatory quality and R&D in designing effective mitigation strategies. The paper contributes to the literature by providing a comprehensive, data-driven assessment of emission determinants in emerging European economies and offers valuable insights for policymakers aiming to align economic growth with environmental sustainability.