Investigating the effects of renewable energy on international trade and environmental quality

This research investigates how renewable energy consumption interacts with international trade and environmental quality in Nordic counties from 2001 to 2018. The present study adopted the CIPS unit root test and cross-sectional dependence (CD) test to test the stationarity and diagnose the cross-sectional dependence issues, respectively. Further, the study employed a dynamic common correlated effect (DCCE) model for robustness. The findings revealed that renewable energy strongly and positively associated with international trade in Nordic countries. Also, the results indicate that renewable energy consumption improved to environmental quality. Therefore, policies to promote renewables can provide for economic growth and environmental sustainability and ensure crucial sustainable development goals. Further, the findings provide theoretical support for the formulation of eco-friendly policies to understand the role of renewable energy in spurring international trade, which supports balancing eco-environmental sustainability.