INVESTIGATING THE RELATIONSHIP BETWEEN RENEWABLE ENERGY, CARBON EMISSIONS AND GREEN GDP (CASE OF NORTH MACEDONIA)

Energy production, distribution, and consumption, while necessary for economies to keep running, unfortunately, put pressure on the environment. The pressures differ, depending on how energy is produced and consumed, but this poses a big challenge in achieving sustainable development goals and sustainable economic development since most of the patterns of energy supply and use are unsustainable. Energy-related environmental pressures, such as air pollution and global warming mainly depend on the energy sources and quantity of energy used. Approaches to reduce energy-related environmental challenges include using less energy, lowering the demand for energy-related activities, using energy more efficiently, or switching to renewable energy sources. North Macedonia even though it primarily relies on non-renewable energy sources, during the analyzed period has made slight improvements to increase its renewable energy sources. This paper analyzes the relationship between three indicators (Renewable energy supply as % of total supply, annual CO2 emissions, and green GDP) using correlation and regression models. The results confirm that there is a moderate negative relationship between renewable energy sources and annual CO2 emissions and a very strong negative relationship between annual CO2 emissions and green GDP. Given that North Macedonia increases its renewable energy supply by 1% (with respect to its total energy supply), the annual carbon emissions would fall by 0.4 million tons, which in turn would positively impact green GDP.

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