The Effect of Renewable Energy Use and ICT Development on CO2 Emissions in EU Transition Economies: Evidence from Causality and Cointegration Analyses Under the Presence of Cross-Sectional Dependence and Heterogeneity

CO2 emissions are amongst the most significant contributors to global warming and climate change and continue to increase throughout the world. In this regard, this study investigates the interplay amongst renewable energy use, ICTs, economic development, and CO2 emissions in EU transition economies during the years of 2000–2021 through Emirmahmutoglu and Kose’s causality approach and LM bootstrap cointegration test. Panel-level causality analysis indicates a feedback interaction amongst renewable energy use, economic development, and CO2 emissions, but a one-way causal effect of CO2 emissions on ICT development. However, country-level causality analysis shows that the causal relationships amongst renewable energy use, ICTs, economic development, and CO2 emissions change among EU transition economies. The estimated cointegration coefficients reveal that renewable energy use has a negative impact on CO2 emissions in all countries, while the effects of ICTs and economic development on CO2 emissions differ amongst the countries. The findings of this study emphasize the significant roles of renewable energy use and ICTs to reduce CO2 emissions.