How solar-based renewable energy contributes to CO2 emissions abatement? Sustainable environment policy implications for solar industry

Renewable energy sources are gaining popularity because they are less expensive and more efficient than traditional energy sources. Using data from 1991 to 2018, we examined the asymmetric impact of solar energy consumption on CO2 emissions in the top-ten solar energy-consumer economies (China, the United States, Japan, Germany, India, Italy, Australia, Vietnam, South Korea, and Spain). Earlier research has used a panel data technique, which has produced consistent conclusions on the solar power–CO2 emissions association, despite the fact that some economies have no evidence of such a linkage. The current study, on the other hand, employs a unique methodology known as “quantile-on-quantile,” which can evaluate time-series dependence in each economy separately to give world yet country-related information for the association among the variables. The findings investigate how quantiles of solar energy consumption quantiles influence CO2 emissions quantiles asymmetrically by giving an appropriate structure to apprehend the whole dependency pattern. The results suggest that, except in Spain and India, solar energy consumption minimizes carbon dioxide emissions at various quantiles. However, the strength of nonlinear association in solar energy–CO2 emissions nexus varies from country to country that needs individual attention and caution for governments in developing the policies related to the solar industry and the sustainable environment.