Green Transition Asymmetry and Carbon Emissions in the EU: A PMG-NARDL Analysis

This study examines the asymmetric effect of the EU’s green transition on carbon emissions across 27 member states from 2000 to 2025 (675 observations), integrating several theoretical perspectives, including environmental economics, ecological economics, green growth, the Porter hypothesis, ecological modernization, the circular economy, eco-innovation, and sustainability transition theory, to fill gaps in earlier research. Using a PMG-NARDL model, it finds that a slowdown in renewable energy growth raises emissions far more (coefficient 2.030) than an acceleration reduces them (1.287), a difference confirmed by the Wald test (p = 0.000). GDP is the main long-run driver of emissions (β = 0.223), energy consumption has a smaller effect (β = 0.077), and the significant error correction term (-0.097) confirms a long-run relationship, with an adjusted R² of 0.8587. Descriptively, a 1% rise in green spending increases GDP by 0.42%, environmental jobs grew 123% between 2000 and 2022, and renewables reached 27.5% of final consumption in 2024, just 2.5 points below the 2030 target. The study concludes that sustaining the green transition’s momentum matters more than accelerating it, since the harm of a slowdown outweighs the benefit of speeding up, so EU policymakers should ensure continuous green investment and address institutional differences among member states.