Renewable Electricity Transition, Energy Intensity, and Carbon Performance: A Cross-Country Business-Economics Analysis

Abstract

This paper investigates the hypothesis of renewable electricity transition as a stronger carbon performance in a business-economics context. Using a reproducible panel of 3772 country-year observations from 166 countries over 2000-2022, drawn from the public our world in data energy repository, the paper evaluates how renewable electricity share, income level, and energy intensity shape two environmental outcomes: electricity carbon intensity and greenhouse gas emissions per capita. The empirical design is a country and year fixed effect with country specific standard errors that are clustered around the country to ensure structural heterogeneity and time shocks are contained. The baseline results indicate that the renewable electricity share has a negative relationship with the electricity carbon intensity and the greenhouse gas emission per capita. The emissions model shows that GDP per capita and energy intensity are both positively related to emissions, but the correlation between the share of renewable electricity and income is not significant. Further robustness checks using lagged renewable penetration, balanced-panel estimation, winsorization, an added population control, and an alternative measure of low-carbon electricity affirm the overarching finding. The paper adds a clear and replicable business oriented model of electricity transition to environmental performance and provides strategy, investment and public policy implications.