Long-Run Relationships Between Economic Growth, Urbanization, Renewable Energy, and CO2 Emissions in Greece

Carbon dioxide (CO2) emissions represent a core driver of climate change, environmental degradation, and quality of life, closely associated with human-related activities. The European Union (EU) has set ambitious emissions reduction targets and introduced various frameworks to its members, including Greece, to achieve specific objectives that involve establishing robust emissions estimating mechanisms. The present study examines a period of approximately 6 decades (1965–2023) to analyze the impact of key indicators of the CO2 emissions in Greece. To explore the relationships between CO2 emissions, Gross Domestic Product (GDP), urbanization, and Renewable Energy Sources (RES), the research employs Ordinary Least Squares (OLS) regression as the primary analytical tool. The analysis demonstrates a strong explanatory power (R2 = 0.918), highlighting that an increase in real GDP is associated with a substantial rise in CO2 emissions, indicating a strong positive long-run relationship between economic activity and environmental pressure. Similarly, a 1% increase in urbanization is associated with an additional 1.5–2 million tons of annual emissions; conversely, a 1% growth in the share of RES contributes to a reduction of approximately 4.5 million tons of CO2. Overall, the findings and methodological approach underscore the critical role of renewable energy adoption and provide a comprehensive framework for assessing and formulating environmental policies and strategies. The main contribution of this paper is its long-run econometric evaluation of CO2 emissions in Greece. It uses variables related to the economy, society, and the energy transition, yielding results that can inform policymakers’ national decarbonization strategies and broader environmental protection efforts.