Unravelling the non-linear Impact of Energy Diversification on CO2 Emissions: Evidence from Emerging Economies

Global warming is a global issue. Goal 13 of the Sustainable Development Goals (SDGs) of the United Nations (UN) emphasizes the reduction of carbon emissions. Fossil fuel energy is a major source of carbon emissions. A transition to a cleaner energy mix can be helpful, however, this dynamic is less explored. Therefore, this study assesses the nonlinear effect of energy diversification on carbon emissions in case of emerging economies including Brazil, India, Russia, Turkiye, China, Mexico and Indonesia. These countries are among the highest polluters. Results suggest that a significant U-shaped relation prevails between carbon emissions and energy diversification. An initial increase in energy diversification lowers the carbon 443emissions. This relation reverses at very high levels of energy diversification. After a certain threshold point, further increase in energy diversification increases the carbon emissions. Growth, trade openness and urbanization are among the other significant contributing factors. Dataset spanning from 1991-2023 is used for estimation. Results of the study suggest a careful selection of energy mix to optimally handle the issue of carbon emissions.