Determinants of Carbon Dioxide Emission: The Role of Energy Consumption, Investment, Economic Development, and Environmental Policy in Developed and Developing Countries

Environmental degradation, which significantly affects human survival and the global economy, has intensified efforts to reduce carbon dioxide emissions; however, emissions continue to rise, reflecting persistent and complex challenges. This study examines the effects of Environmental Policy Stringency (EPS), Foreign Direct Investment (FDI), Domestic Investment (DMI), Gross Domestic Product (GDP), and energy consumption including oil, solar, wind, and hydropower on carbon dioxide emissions (CO2E) from 1990 to 2020 in both developed and developing countries, using Ordinary Least Squares (OLS) within a production function framework. The findings show that oil consumption, FDI, and DMI increase emissions in developed countries, while oil consumption and GDP are positively related. In contrast, renewable energy sources such as solar, wind, and hydropower reduce emissions in developing countries. Accordingly, developed countries should focus on clean energy investment for advanced technological infrastructure, whereas developing countries should prioritize the transition to renewable energy.

Carbon dioxide Emissions, Energy consumption, Investment, Economic development and Environmental Policy Stringency

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