Investigation of the marginal impact of electricity generation sources on CO2 emissions in highly emitting countries by daily data and KRLS approach

Abstract Considering countries’ efforts to combat climate change and the critical role of energy use in carbon dioxide (CO 2 ) emissions, this study empirically analyzes the impact of electricity generation (EG) sub-types on CO 2 emissions. In this vein, the study focuses on the five highly emitting countries (namely, China, the United States, India, Russia, & Japan), uses daily data from 1st January 2019 to 30th June 2024, and implements a kernel regularized least squares (KRLS) approach to consider average and marginal impacts in empirical analyses. The empirical outcomes demonstrate that (i) gas and nuclear EG decreases CO 2 emissions for India; hydro EG is curbs CO 2 emissions in India and Japan; oil EG decreases CO 2 emissions at lower percentiles in the USA; (ii) coal EG cause an increase in CO 2 emissions in the all countries; (iii) wind EG provides a decrease in CO 2 emissions at lower percentiles in the USA and Japan, whereas its effect becomes ineffective across remaining percentiles and countries; (iv) solar EG is the unique source that has a declining impact across countries; (v) the KRLS approach has a high estimation capacity (R 2 : 93.53%). Overall, the study reveals average and marginal impacts of EG subtypes on CO 2 emissions across percentiles and countries. Accordingly, through consideration of empirical outcomes (e.g., solar EG is the most beneficial EG source for all countries) while some other EG sub-types are partially beneficial (e.g., gas EG in China and India; hydro EG in all countries; nuclear EG in all countries except Russia; wind EG in United States, India, and Japan), the study argues various policy implications (e.g., prioritizing the most helpful EG sources in providing further governmental support, focusing on first solar EG and then followed by hydro, nuclear, and wind EG to stimulate new capacity installation).