This study analyzes the impact of investments in renewable energy on the decarbonization process of North Macedonia, examining the relationships between key variables: CO2 emissions, gross domestic product (GDP), inflation and regulatory index. The research aims to understand how investments in renewable sources (such as solar, wind, and hydropower) influence the reduction of greenhouse gas emissions, while accounting for economic dynamics. The study applies a VAR (Vector Autoregressive) model to uncover dynamic interactions between renewable energy investments and CO2 emissions in North Macedonia, using time-series data from 2000 to 2023. Through this econometric model, the impact of renewable energy investments on CO2 reduction is explored, identifying a statistically significant link between increased renewable capacity and reduced emissions. The results highlight the critical role of investments in achieving decarbonization goals, arguing that policies promoting financing for sustainable energy projects are essential for significant national CO2 reduction. The study integrates empirical analysis with policy recommendations, providing a rigorous framework for evidence-based decision-making. Renewable energy capacity expansion shows a statistically significant negative correlation with CO2 emissions, confirming its decarbonization role. However, the tests did not find evidence suggesting a causal relationship between investments in renewable energy and economic growth or inflation, although such a link was expected.