Is energy inflation a double-edged sword for the green transition? A global analysis of renewable energy and environmental sustainability

Energy derived from conventional fossil fuels is considered the primary reason behind the rising global carbon emissions. Enhancing the production of alternative and renewable energy sources is the most viable solution to mitigate carbon emissions without hindering economic growth. Energy inflation has the ability to impact both carbon emissions and renewable energy production. Therefore, the primary objective of this analysis is to investigate the impact of energy inflation on renewable energy production and carbon emissions for 35 global countries from 1996 to 2023, utilizing advanced econometric methods such as the CS-ARDL. The outcomes confirm that energy inflation helps foster renewable energy production and mitigates CO 2 emissions in the long-run. The empirical findings reveal that a 1% increase in energy inflation increases renewable energy production by 0.0147% and reduces CO 2 emissions by 0.0561% in the long run. However, we only observe a significant positive connection between energy inflation and renewable energy in the short-run. Moreover, GDP, environmental technologies, and financial development are also important determinants of renewable energy production. Policymakers should use higher energy inflation as an incentive to control carbon emissions and enhance renewable energy production.