A system-GMM approach to examine the renewable energy consumption, agriculture and economic growth’s impact on CO₂ emission in the SAARC region

This study aims to investigate the relationship between renewable energy consumption, agriculture, economic growth, and CO₂ emission in the South Asian Association for Regional Cooperation (SAARC) countries. We used annual cross-sectional data from 2000 to 2017 and applied panel fixed effect regression and two-step system Generalized Method of Moments (GMM) estimator to check the robustness of the variables. Results of panel fixed regression indicate that the value of renewable energy consumption has a significant but negative effect, whereas economic growth shows substantial positive relation with carbon dioxide (CO₂) emission, while no relationship exists between agriculture and CO₂ under this method. However, agriculture and renewable energy consumption have a negative and considerable association in GMM estimation, and the impact of economic growth is positive and significant. The results imply that renewable energy consumption and agriculture with emission-free methods were essential drivers in lessen the CO₂ emission, and regional cooperation may accelerate the progress to achieve ecological benefits and sustainable atmosphere in the SAARC countries. Furthermore, in the future, most of the regional states are planning to invest in non-renewable energy to impulse economic growth and to meet the necessary energy demands of growing population that will bring more CO₂ in the environment.