Renewable energy consumption, environmental degradation and economic growth. evidence from 32 European countries

As European economies rely on fossil fuels, a paradigm shift in energy has become a crucial issue, pushing several countries to adopt cleaner energy policies and investments. Recently, the Russia–Ukraine conflict has further strengthened the need for a European energy policy aimed at decarbonizing energy systems. Hence, understanding how European countries can respond to energy shocks is crucial. We analyzed the relationship between renewable energy consumption (REC), economic growth, and carbon dioxide (CO2) emissions in 32 European countries from 1990 to 2023. Our results indicate that REC reduces CO2 emissions in the short term, although its effect attenuates over time, suggesting that expanding renewable energy alone cannot ensure lasting decarbonization. From a policy perspective, stricter environmental regulations could stimulate the development of renewable energy, although this could compromise economic growth. Overall, green growth requires grid integration and policy credibility, whereas Eastern countries can attain decoupling via structural reforms.