Decomposing the Renewable Energy as Clean and Non‐Clean: Evidence From Top Renewable Energy–Consuming Countries

ABSTRACT This study examines the impact of aggregate and disaggregated renewable energy consumption while considering economic growth, remittances, urbanisation and foreign direct investment (FDI) on environmental degradation, proxied by the ecological footprint, across major renewable energy–consuming countries over the period 1984–2020. Employing the Dynamic Common Correlated Effects (DCCE) estimator, the study captures long‐run impacts while accounting for cross‐sectional dependence and heterogeneity. The findings reveal that aggregate renewable energy consumption significantly reduces environmental degradation. However, the disaggregated analysis uncovers heterogeneous effects across energy types: solar energy consumption reduces the ecological footprint, whereas hydropower and wind energy increase environmental pressure, likely due to lifecycle and infrastructure‐related impacts. Furthermore, economic growth, remittances and FDI are found to exacerbate environmental degradation, while urbanisation contributes to environmental improvement. These results highlight the importance of moving beyond aggregate energy measures and adopting a component‐specific approach to renewable energy policy. The study provides policy‐relevant insights for advanced renewable energy–consuming countries, emphasising the need to prioritise solar energy expansion while mitigating the environmental impacts of other renewable sources.