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<p>This research examines the nonlinear impact of temperature fluctuations on the economic performance of European Union countries from 2000 to 2023. Using advanced econometric approaches, including panel smooth transition autoregression (PSTAR), and dynamic generalized method of moments (GMM) models, the study identifies notable threshold effects and regime-dependent patterns in the temperature–growth nexus. The analysis also reveals that transitions between temperature regimes occur gradually, reflecting progressive climatic adaptations. Interaction assessments indicate that the use of renewable energy significantly mitigates the harmful economic consequences of temperature extremes, thereby strengthening resilience. In contrast, higher CO₂ emissions intensify the detrimental effects of warming on growth. This work contributes to the existing literature by providing nuanced evidence of temperature-related economic risks and the buffering potential of clean energy in a high-income, policy-coordinated context.</p> Graphical abstract <p></p>

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Nonlinear climate-economic dynamics in the European union: the role of renewable energy and emissions in temperature-induced growth effects

  • 期刊论文

  • 发表日期：

    2026年2月26日

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  • Olfa Zarrad,
  • Hajer Chibani,
  • Thouraya Jaballah,
  • Kamel Helali

摘要

This research examines the nonlinear impact of temperature fluctuations on the economic performance of European Union countries from 2000 to 2023. Using advanced econometric approaches, including panel smooth transition autoregression (PSTAR), and dynamic generalized method of moments (GMM) models, the study identifies notable threshold effects and regime-dependent patterns in the temperature–growth nexus. The analysis also reveals that transitions between temperature regimes occur gradually, reflecting progressive climatic adaptations. Interaction assessments indicate that the use of renewable energy significantly mitigates the harmful economic consequences of temperature extremes, thereby strengthening resilience. In contrast, higher CO₂ emissions intensify the detrimental effects of warming on growth. This work contributes to the existing literature by providing nuanced evidence of temperature-related economic risks and the buffering potential of clean energy in a high-income, policy-coordinated context.

Graphical abstract