Proceedings of the 70th International Academic Conference, Madrid

GREEN FINANCE AND CARBON INTENSITY: EVIDENCE FROM SELECTED EUROPEAN ECONOMIES INCLUDING TURKEY

OZGE ONKAN, YAGMUR SAGLAM

Abstract:

This study examines the determinants of carbon intensity in selected European economies, including Germany, France, Italy, Spain, the Netherlands, Poland, and Türkiye, over the period 1990-2024. The analysis focuses on the roles of financial development, renewable energy consumption, energy intensity, inflation, tax revenue, and GDP per capita. Considering cross-sectional dependence and structural heterogeneity across countries, the Dynamic Common Correlated Effects Mean Group (DDCEMG) estimator is employed. The empirical results indicate that renewable energy consumption is the only variable with a statistically significant long-run effect on carbon intensity at the panel level. Other macroeconomic variables do not show robust average effects. Overall, the findings suggest that structural transformation in the energy mix plays a more decisive role in reducing carbon intensity than general macro-financial expansion.

Keywords: Carbon intensity; renewable energy; financial development; DCCE; European economies.

DOI: 10.20472/IAC.2026.070.012

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