Cyclical and Structural Drivers of CO₂ Emissions in the European Countries. Annual Panel Evidence for 2000–2023

This paper analyses the innovation and regulatory-induced adjustments in European energy systems and their short-term effects on per capita CO₂ emissions for 28 European countries over the period 2000–2023. Empirically, first-difference panel models with country and year fixed effects and Driscoll–Kraay errors are used to capture annual within-country variations and control for common shocks. The results show that the normalized Shannon index, as a generic measure of diversity, has no short-term predictive power, while the actual composition of the energy mix and demand dynamics explain the annual variations in emissions at the sample level. Specifically, a 1 percentage point increase in the share of renewables is associated with approximately −0.85% in per capita CO₂, and a 1% reduction in the energy intensity of GDP corresponds to a decrease of approximately −0.70%. Through the estimated (semi)elasticities, the study provides operational benchmarks for the annual calibration of energy policies, but also for managerial decisions regarding investment timing, tariff design, and demand management under budgetary constraints.