The Impact of Economic Growth and Renewable Energy Consumption on CO2 Emissions in Vietnam: Testing the Inverted N-shaped Environmental Kuznets Curve

Carbon dioxide (CO2) emissions has been a crucial threat to both the environment and sustained economic growth. Therefore, it is essential for governments to understand how to balance the reduction of CO2 emissions with the pursuit of sustainable development. In this context, this study explores the association between economic growth and CO2 emissions in Vietnam, a country that has experienced strong economic growth in recent years. In this sense, this study aims to verify the existence of an inverted N-shaped Environmental Kuznets Curve (EKC) by examining how environmental quality has changed in response to economy growth in Vietnam. In addition, the study investigates the relationship between CO2 emissions and renewable energy consumption. The empirical results indicates that Vietnam exhibits an inverted N-shaped EKC. These findings suggest that the linear and cubic terms of GDP per capita significantly contribute to the reduction of CO2 emissions, while the quadratic term does not. The study also shows that increased consumption of renewable energy leads to reduction in CO2 emissions. Therefore, it is crucial for Vietnam to promote the consumption of renewable energy to achieve carbon neutrality in the future.