This study aims to contribute to the existing literature by looking at the influence of foreign direct investment on carbon dioxide emissions, carbon footprint, and ecological footprint. In order to realize the aim of this study, we have utilized the augmented mean group estimator, which is supported by common correlated effect mean group estimator in the analysis for 20 countries. The panel results reveal that foreign direct investment has no effect on environmental degradation indicators. The panel results further reveal that gross domestic product, energy consumption, and urbanization are the main contributors to environmental degradation. The results at country level show that foreign direct investment and urbanization increase pollution in the developing countries while they mitigate pollution in the developed countries. Moreover, gross domestic product and energy consumption increase pollution for both developed and developing countries, which includes China and the USA. The negative impact of foreign direct investment on environmental degradation in the developed countries can be explained on the basis that these countries have strong environmental regulations, which makes it almost impossible for dirty foreign industries to invest therein. From the output of this research, several policy recommendations are enumerated for the investigated countries.
In this article, we have examined the hypothesis of convergence of renewable energy consumption in 27 OECD countries. However, instead of relying on classical techniques, which are based on the dichotomy between stationarity I(0) and nonstationarity I(1), we consider a more flexible approach based on fractional integration. We employ both parametric and semiparametric techniques. Using parametric methods, evidence of convergence is found in the cases of Mexico, Switzerland and Sweden along with the USA, Portugal, the Czech Republic, South Korea and Spain, and employing semiparametric approaches, we found evidence of convergence in all these eight countries along with Australia, France, Japan, Greece, Italy and Poland. For the remaining 13 countries, even though the orders of integration of the series are smaller than one in all cases except Germany, the confidence intervals are so wide that we cannot reject the hypothesis of unit roots thus not finding support for the hypothesis of convergence.
Studies have shown that factors like trade, urbanization, and economic growth may increase the ecological footprint (EFP) since ecological distortions are mainly human-induced. Therefore, this study explores the effect of economic growth and urbanization on the EFP, accounting for foreign direct investment and trade in Nigeria, using data from 1977 to 2016. This study used the EFP variable as against the CO2 emissions used in the previous studies since the former is a more comprehensive and extensive measure of environmental quality. We apply the novel dynamic autoregressive distributed lag (ARDL) simulations for model estimation, the Bayer and Hanck J Time Ser Anal 34: 83-95, (2013) combined cointegration, and the ARDL bounds test for cointegration. Although the results affirmed the presence of long-run relationship among the variables, economic growth deteriorates the environment in the short run, while urbanization exacts no harmful impact. In the long run, FDI and trade deteriorate the environment while economic growth adds to environmental quality. It is recommended that policymakers strengthen the existing environmental regulations to curtail harmful trade and provide rural infrastructures to abate urban anomaly.
Wind energy is one of the renewable energy sources that has been touted to address the challenges of energy security and environmental degradation. This is only attainable if countries with substantial wind energy potential use it in significant proportion to satisfy their energy needs. One promising sector where wind energy can be employed to actualize this potential is the electricity sector. However, the current reality is that fossil fuels still dominate the energy profiles of most economies of the world, including the advanced economies, with wind renewable energy source accounting for a very small proportion of the energy mix. Germany is one of the few countries that offers promising opportunities in deploying wind energy to its full potentials. This study therefore explores the feasibility of substituting wind energy for nuclear energy and other fossil fuels using Germany as a country of focus. We use the ridge regression procedure to analyse yearly time series data for the German power sector that spans the period 1986 to 2018. With respect to output elasticities of the energy inputs, the results reveal that wind and natural gas have positive output elasticity estimates while the estimates for nuclear and coal are negative. We also found that all the inputs pairs have positive substitution elasticity estimates between them. With respect to wind energy, the highest substitutability estimate occurred with nuclear power which is followed by natural gas and then coal. The study recommended that policies such as granting of tax credit for wind energy technology, reduction in property taxes for wind power facilities, and allocation of fund for research and development (R&D) in wind energy technology are recommended to promote the use of wind energy in the economy.
Environmental degradation remains a huge obstacle to sustainable development. Research on the factors that promote or degrade the environment has been extensively conducted. However, one important variable that has conspicuously received very limited attention is energy innovations. To address this gap in the literature, this study investigated the effects of energy innovations on environmental quality in the U.S. for the period 1974 to 2016. We have incorporated GDP and immigration as additional regressors. Three indices comprising of CO2 emissions, ecological footprint and carbon footprint were used to proxy environmental degradation. The cointegration tests established long-run relationships between the variables. Using a maximum likelihood approach with a break, the results showed evidence that energy innovations significantly improve environmental quality while GDP degrades the quality of the environment, and immigration has no significant effect on the environment. Policy implications of the results are discussed in the body of the manuscript.
The energy profile of India is dominated by fossil fuels, which create concerns over resource and environmental sustainability as fossil fuels are non-renewable and high carbon emitting. This scenario has necessitated the call for more renewables to replace fossil fuels to address resource and environmental sustainability concerns. This study, therefore, investigates the possibility of switching the fossil fuels of oil, coal, and natural gas for renewable energy in India. Using annual Indian data spanning more than four decades, a transcendental logarithmic production function based on a second-order Taylor Series approximation is estimated with the ridge regression technique. To achieve robustness, two equations with gross domestic product and adjusted net savings as regressands are estimated to proxy economic growth and sustainable development, respectively. The empirical results show substantial substitution possibilities between the fuels for both gross domestic product and adjusted net savings equations. The empirical findings show that India has the capacity to satisfy its energy needs through renewables to pursue not only economic growth but sustainable development. To actualize this potential, the Indian government should promote investment in renewables as this also promotes economic growth and development.
In this study we examine the time-varying causal effect of the novel COVID-19 pandemic in the major oil-importing and oil-exporting countries on the oil price changes, stock market volatilities and the economic uncertainty using the wavelet coherence and network analysis. During the period of the pandemic, we explore such relationship by resorting to the wavelet coherence and gaussian graphical model (GGM) frameworks. Wavelet analysis enables us to measure the dynamics of the causal effect of the novel covid-19 pandemic in the time-frequency space. Regarding the findings displayed herein, we first found that the COVID-19 pandemic has a severe influence on oil prices, stock market indices, and the economic uncertainty. Second the intensity of the causality effect is stronger in the longer horizon than in the short ones, suggesting that the causality exercise continues. Our findings also provide evidence that the COVID-19 pandemic and oil price changes in oil-importing countries mirror those in oil-exporting countries and vice versa. Further, the COVID-19 pandemic has a profound immediate time-frequency effect on the US, Japanese, South Korean, Indian, and Canadian economic uncertainties. A better understanding of oil and stock market prices in the oil-importing and oil-exporting countries is vital for investors and policymakers, specially since the novel unprecedented COVID-19 crisis has been recognized among the most serious ever happened. Thus, the findings suggest that the authorities should strongly take efficient actions to minimize risk.
Although there are papers on the persistence of energy series including the persistence of shale gas, the impact of recent developments such as the Covid-19 pandemic and Russia-Ukraine conflict have been rarely explored in the existing literature. This paper examines the structure of shale gas production in the U.S. by looking at the degree of persistence across different areas, with the aim to determine if shocks in the series are permanent or transitory. Using fractional integration methods (which unlike the conventional methods, allow for the determination of the persistence of energy and non-energy series in a robust manner), and different subsamples that include the Covid-19 pandemic and the Russia-Ukraine war, our results indicate that there is a substantial decrease in the integration order in the total shale gas production in the U.S. as well as in four other plays-Haynesville, Permian, Utica and Eagle Ford. However, no differences are observed with respect to the Russia-Ukraine war. There is another group of four series (Marcellus, Niobrara-Codell, Woodford and Rest of US 'shale') with a very small reduction in the degree of persistence and another group of three series with almost no reduction at all in the order of integration (Barnett, Mississippian and Fayetteville). Several implications in terms of policy are reported at the end of the manuscript.
This paper focusses on the examination of the fishing ground footprint in a group of 89 countries using fractional integration. The fishing ground footprint is one of the components of the ecological footprint. Nevertheless, it has not been investigated very much from an empirical viewpoint. We contribute to the existing literature on fishing ground footprint by using fractional integration techniques to examine the persistence of the series. Our results are very heterogeneous across countries though we find that most of the series are nonstationary and non-mean reverting, with most of the countries belonging to the upper-middle and high income levels. On the other hand, most of the 14.4% of countries that show a stationary pattern belong to lower-middle and low income countries. One of the implications of the study is that policies aimed at reducing fishing grounds footprint are likely to be effective in most of the investigated countries.
This study has examined the factors of fishing grounds footprint in Malaysia during 1961-2018, which has been used as the indicator of environmental degradation. The main contribution of this paper is that we have considered the role of aggregated and disaggregated fisheries production on pollution in the fishing industry. Another contribution of this study is that the environmental impact of activities of licensed fishermen has been examined. The results suggest that the total fisheries production and its components- capture fisheries production and aquaculture production generate an increase in fishing grounds footprint in Malaysia. The results suggest that an increase in total licensed fishermen facilitate an increase in fishing grounds footprint. There is mixed evidence on the impact of local fishermen on fishing footprint. The results indicate that an increase in foreign fishermen facilitate an increase in fishing grounds footprint. The results suggest mixed evidence for Environmental Kuznets Curve (EKC) hypothesis.
The objective of this study is to examine the impact of natural gas consumption, output, and urbanization on CO2 emission in China and India for the period, 1965-2013. A cointegraton test, which provides for endogenously determined structural breaks, has been applied to examine the long-run relationship and to investigate the presence of environmental Kuznets curve (EKC) in the two countries. The presence of causal relationship between the variables is also investigated. The findings show that there is a long-run relationship in the variables and natural gas, real GDP, and urbanization have long-run positive impact on emission in both countries. There is no evidence for EKC in China and India. The findings further suggest that there is a long-run feedback relationship between the variables. The policy inferences of these findings are discussed.
Global warming remains the most devastating environmental issue embattling the global economies, with significant contributions emanating from CO2 emissions. The continued rise in the level of greenhouse gas (GHG) emissions serves as a compelling force which constitutes the core of discussion at the recent COP26 prompting nations to commit to the net-zero emission target. The current research presents the first empirical investigation on the roles of technological advancement, demographic mobility, and energy transition in G7 pathways to environmental sustainability captured by CO2 emissions per capita (PCCO2) from 2000 to 2019. The study considers the additional impacts of structural change and resource abundance. The empirical backings are subjected to pre-estimation tests consisting of cross-sectional dependence, second-generation stationarity, and panel cointegration tests. The model estimation is based on cross-sectional augmented autoregressive distributed lag, dynamic common correlated effects mean group, and augmented mean group for the main analysis and robustness checks. The findings reveal the existence of EKC based on the direct and indirect effects of the components of economic growth. The indicators of demographic mobility differ in the direction of influence on PCCO2. For instance, while rural population growth negatively influences PCCO2 in the short-run alone, urban population growth increases PCCO2 in the short-run and long-run periods. Nonrenewable energy, information computer technology (ICT) imports, and mobile cellular subscriptions serve as positive predictors of PCCO2, while ICT exports and renewable energy moderate the surge in PCCO2. Policy implications that enhance environmental sustainability are suggested following the empirical verifications.
Despite being directly related to anthropogenic consumption and production, researchers have paid less attention to understanding the dynamics of non-methane volatile organic compounds. The primary objective of this research is to investigate the persistence of potential shocks to non-methane volatile organic compounds in 20 developed from 1820 to 2019 performing traditional unit root approaches and a newly developed Fourier quantile unit root test. Great portion of the empirical results obtained by traditional unit root tests reveal that the sectoral non-methane volatile organic compounds follow a non-stationary process, while the Fourier quantile unit root test indicate quite different results. The Fourier quantile test shows that non-methane volatile organic compounds are stationary in the United Kingdom, Ireland, Germany, France and Austria. In the other 15 countries, government interventions to reduce non-methane volatile organic compounds can have lasting effects and success. The inferences and policy outcomes of the empirical results are discussed in the main body of the paper.
We investigate the role of military expenditure on emission in USA during the period 1960-2015. To achieve the objectives of this study, two measures of military expenditure are utilised, while several timeseries models are constructed with the gross domestic product (GDP) per capita, population, energy consumption per capita, non-renewable energy consumption per capita, renewable energy consumption per capita, urbanisation, trade openness and financial development serving as additional determinants of air pollution. We also use ecological indicator as an alternative measure of pollution. Moreover, different timeseries methods are utilised including a likelihood-based approach with two structural breaks. The output of this research concluded that all the variables are cointegrated. It is found that military expenditure has mixed impact on CO2 emissions. Real GDP per capita, energy consumption per capita, non-renewable energy consumption per capita, population and urbanisation increase CO2 emissions per capita in the long-run, while renewable energy consumption, financial development and trade openness reduce it. There is also evidence for the mixed role of military expenditure, when ecological footprint is utilised as the environmental degradation index. From the output of this research, few policy recommendations are offered for the examined country.
The objective of this research is to examine the effects of stock market on air pollution in Malaysia during the period 1980-2017. To realize this aim, a nonlinear autoregressive distributed lag (ARDL) model is constructed. The short results in general revealed that the increase in stock markets will increase CO2 emissions and its significance increases in the long run. Moreover, the decline in stock market will reduce Malaysia's CO2 emissions but only in the long run. From the outcomes obtained, a number of policy recommendations were provided for the investigated country.
The reduction in oil prices might make crude oil a cheaper alternative to renewable energy (RE). Given this, the present paper examines the effect of fluctuation of oil prices on the use of RE in the United States (US) during the period 1970 to 2018. We constructed two nonlinear autoregressive distributed lag (NARDL) models to examine the effect of the positive and negative oil price shocks on the use of RE in the US. The RE consumption is taken as the dependent variable and the gross domestic product (GDP), Brent crude prices, population density, trade openness, and price index as independent variables. The result revealed that the rise in crude oil price, GDP, and population density will increase RE use in the short run and in the long run as well. Moreover, the study finds that any decrease in oil prices will decrease RE use in the short run and its effect will eventually diminish in the long run. On the policy front, it is suggested that US should raise its energy security by reducing its dependency on imported crude oil and increase the role of RE through the imposition of taxes on oil and increase the base of production and consumption through a series of measures.
This paper aims to examine convergence of income inequality in 21 OECD countries using several empirical techniques. In particular, we have used a new panel stationarity test, which allows for structural changes and cross-sectional dependence to examine the stochastic convergence of income inequality. We also employed a time series approach, residual augmented least squares-Lagrange multiplier unit root test. The empirical results show evidence for absolute, conditional, and sigma convergence. The conditional convergence test results suggest that countries are converging, but conditional on the two structural factors-economic and population growth. The stochastic convergence test results indicate the existence of convergence at the country-specific level. The results further confirm the existence of convergent clubs among OECD countries.
The main objective of this study is to investigate the influence of the globalisation (Trans-Pacific Partnership (TPP) agreement in particular) on air pollution in Malaysia. To achieve this goal, the Autoregressive Distributed Lag (ARDL) model, Johansen cointegration test and fully modified ordinary least square (FMOLS) methods are utilised. CO2 emission is used as an indicator of pollution while GDP per capita and urbanisation serve as its other determinants. In addition, this study uses Malaysia's total trade with 10 TPP members as an indicator of globalisation and analyse its effect on CO2 emission in Malaysia. The outcome of this research shows that the variables are cointegrated. Additionally, GDP per capita, urbanisation and trade between Malaysia and its 10 TPP partners have a positive impact on CO2 emissions in general. Based on the outcome of this research, important policy implications are provided for the investigated country.
The objective of the study is to extend the existing literature by investigating the effects of foreign direct investment, gross domestic products and per capita and energy diversification on the nitrogen oxide emissions in Brazil, Russia, India, China and South Africa (BRICS) by using annual data during the period 1992-2019. As per our knowledge, the present study is a first of its kind to examine the impact of a new energy diversification index, based on Herfindahl-Hirschman framework on pollution. This study has adopted a new quantile regression augmented method of moments, which is capable of producing the total impacts of the independent variables across the entire distribution of nitrogen oxides emissions. The findings suggest that an increase in foreign direct investment leads to a decrease in nitrogen oxides emissions at the aggregate level and in both manufacturing and service sectors. We observe that foreign direct investment leads to an increase in nitrogen oxides emissions in the agricultural sector in most of the quantiles. Diversification towards renewable energy causes a decrease in nitrogen oxides emissions in most quantiles at aggregate level, agricultural and manufacturing sectors, whilst diversification leads to an increase in nitrogen oxides emissions in the service sector. The findings also suggest that GDP per capita leads to an increase in NOx emissions in all the quantiles. The study suggests the policy to use and attract more clean energy through foreign direct investment for towards the achievement of sustainable development.
The aim of this research is to explore the effect of biomass energy consumption on CO2 emissions in 80 developed and developing countries. To achieve robustness, the system generalised method of moment was used and several control variables were incorporated into the model including real GDP, fossil fuel consumption, hydroelectricity production, urbanisation, population, foreign direct investment, financial development, institutional quality and the Kyoto protocol. Relying on the classification of the World Bank, the countries were categorised to developed and developing countries. We also used a dynamic common correlated effects estimator. The results consistently show that biomass energy as well as fossil fuel consumption generate more CO2 emissions. A closer look at the results show that a 100% increase in biomass consumption (tonnes per capita) will increase CO2 emissions (metric tons per capita) within the range of 2 to 47%. An increase of biomass energy intensity (biomass consumption in tonnes divided by real gross domestic product) of 100% will increase CO2 emissions (metric tons per capita) within the range of 4 to 47%. An increase of fossil fuel consumption (tonnes of oil equivalent per capita) by 100% will increase CO2 emissions (metric tons per capita) within the range of 35 to 55%. The results further show that real GDP urbanisation and population increase CO2 emissions. However, hydroelectricity and institutional quality decrease CO2 emissions. It is further observed that financial development, foreign direct investment and openness decrease CO2 emissions in the developed countries, but the opposite results are found for the developing nations. The results also show that the Kyoto Protocol reduces emission and that Environmental Kuznets Curve exists. Among the policy implications of the foregoing results is the necessity of substituting fossil fuels with other types of renewable energy (such as hydropower) rather than biomass energy for reduction of emission to be achieved.