The Contribution of Energy Use and Production to Greenhouse Gas Emissions: Evidence from the Agriculture of European Countries

Abstract

The submitted study investigates the role of energy use in agriculture and agricultural output in carbon dioxide emissions with the presence of instrumental variables such as rural population and urbanisation. The data set covers 27 European countries during the period 2010–2020. The quantitative approach was applied using cluster analysis with the previous identification of relations between variables by factor analysis. As the second approach, the Two-Stage Least Square (TSLS) model was estimated. Based on the results, three clusters were created. The heatmap demonstrated the similarity between the comprised countries. The most similar countries are Greece and Hungary, while the most different countries are Luxembourg and Malta. Performed TSLS analysis showed that an increase in energy use is associated with an increase in carbon dioxide emissions. On the other hand, greater agricultural output is associated with lower emissions. However, the statistical significance differs across the individual clusters.