Assessing the Effectiveness of Renewable Energy and Regulatory Quality on Germany's Environmental Sustainability

ABSTRACT

This study looks at the variations in Germany's carbon emissions from 1990 to 2022 and the impacts of a number of variables, including GDP, renewable energy use, regulatory quality, and research and development on CO ₂ . The influence of these variables on Germany's CO ₂ was examined using the ARDL model. This study also analyzes the stability of the variables using FMOLS, DOLS, CCR, and diagnostics tests. The results show that renewable energy use, R&D, and regulatory quality have long‐run negative and significant associations with CO ₂ . However, GDP has a substantial positive long‐term relationship with CO ₂ . The ARDL bounds test yields consistent findings when compared to the FMOLS, DOLS, and CCR. Applications of the CUSUM, CUSUMSQ, and Breusch‐Pegan Godfrey, Jarque‐Bera, and LM tests were conducted to evaluate the residuals' performance diagnostics and stability of the model. This study provides Global North countries, particularly Germany and its policymakers, with valuable insights into the transition toward renewable energy, underscoring the importance of increased investment in R&D alongside effective regulatory quality frameworks while serving as a model for global environmental sustainability efforts.