Environmental degradation,economic growth and energy consumption: Evidence of the environmental Kuznets curve in Malaysia

This paper tests for the short and long-run relationship between economic growth, carbon dioxide (CO₂) emissions and energy consumption, using the Environmental Kuznets Curve (EKC) by employing both the aggregated and disaggregated energy consumption data in Malaysia for the period 1980–2009. The Autoregressive Distributed Lag (ARDL) methodology and Johansen–Juselius maximum likelihood approach were used to test the cointegration relationship; and the Granger causality test, based on the vector error correction model (VECM), to test for causality. The study does not support an inverted U-shaped relationship (EKC) when aggregated energy consumption data was used. When data was disaggregated based on different energy sources such as oil, coal, gas and electricity, the study does show evidences of the EKC hypothesis. The long-run Granger causality test shows that there is bi-directional causality between economic growth and CO₂ emissions, with coal, gas, electricity and oil consumption. This suggests that decreasing energy consumption such as coal, gas, electricity and oil appears to be an effective way to control CO₂ emissions but simultaneously will hinder economic growth. Thus suitable policies related to the efficient consumption of energy resources and consumption of renewable sources are required.     

The dynamic impact of renewable energy consumption and financial development on CO2 emissions: For selected African countries

This empirical study examines the impact of economic growth, renewable energy, energy consumption, financial developments, trade openness, and urbanization growth on CO₂ emissions using the Pooled Mean Group (PMG) approach and Granger Causality in the EKC model a data set of 25 African countries over the period 1985–2015. The results showed that increases in renewable energy consumption and trade openness decrease CO₂ emissions, and the EKC hypothesis is supported for the African countries. Granger’s causality results indicated the presence of bidirectional causality between economic growth and financial development and CO₂ emissions. These results could support policymakers manage financial development and consider clean investments and other ecological aspects for sustainable urban development. The causality tests showed a unidirectional causality running from renewable energy consumption to CO₂ emissions in African countries.     

Evaluating carbon dioxide emissions in international trade of China

China is the world's largest emitter of carbon dioxide (CO₂). As exports account for about one-third of China's GDP, the CO₂ emissions are related to not only China's own consumption but also external demand. Using the input–output analysis (IOA), we analyze the embodied CO₂ emissions of China's import and export. Our results show that about 3357 million tons CO₂ emissions were embodied in the exports and the emissions avoided by imports (EAI) were 2333 million tons in 2005. The average contribution to embodied emission factors by electricity generation was over 35%. And that by cement production was about 20%. It implies that the production-based emissions of China are more than the consumption-based emissions, which is evidence that carbon leakage occurs under the current climate policies and international trade rules. In addition to the call for a new global framework to allocate emission responsibilities, China should make great efforts to improve its energy efficiency, carry out electricity pricing reforms and increase renewable energy. In particular, to use advanced technology in cement production will be helpful to China's CO₂ abatement.     

Bounds testing approach to analyzing the environment Kuznets curve hypothesis with structural beaks: The role of biomass energy consumption in the United States

This paper re-examines the specification of the environmental Kuznets curve (EKC) for the US economy by accounting for the presence of a major renewable energy source and trade openness over the period 1960–2016. Biomass energy consumption and trade openness as well as oil prices are considered as additional determinants of economic growth, and consequentially of CO₂ emissions. The bounds testing approach to cointegration is used to examine the long-run relationship between the variables in the presence of structural breaks. The causal relationship between the variables is investigated by applying the VECM Granger causality test and accommodating structural breaks. The results confirm the presence of cointegration between the variables. Moreover, the relationship between economic growth and CO₂ emissions is not only inverted-U shaped but also N-shaped in the presence of structural breaks and biomass. Biomass energy consumption lowers CO₂ emissions. Exports, imports and trade openness are also environment-friendly. The causality analysis underscores a feedback effect between biomass energy consumption and CO₂ emissions. Economic growth still Granger causes CO₂ emissions in this new setup.     

Industrial CO2 emissions from energy use in Korea: A structural decomposition analysis

This paper attempts to quantify energy consumption and CO₂ emissions in the industrial sectors of Korea. The sources of the changes in CO₂ emissions for the years 1990–2003 are investigated, in terms of a total of eight factors, through input–output structural decomposition analysis: changes in emission coefficient (caused by shifts in energy intensity and carbon intensity); changes in economic growth; and structural changes (in terms of shifts in domestic final demand, exports, imports of final and intermediate goods, and production technology). The results show that the rate of growth of industrial CO₂ emissions has drastically decreased since the 1998 financial crisis in Korea. The effect on emission reductions due to changes in energy intensity and domestic final demand surged in the second period (1995–2000), while the impact of exports steeply rose in the third period (2000–2003). Of all the individual factors, economic growth accounted for the largest increase in CO₂ emissions. The results of this analysis can be used to infer the potential for emission-reduction in Korea.     

Corruption,climate and the energy-environment-growth nexus

This paper examines the causal relationships between economic growth, energy consumption and carbon dioxide (CO₂) emissions in high-income and upper-middle-income countries using the simultaneous equations framework, with data from 1985 to 2011. By taking institutional quality (measured by the level of corruption) and climate (measured by average temperatures over the winter and summer months) into account, this is the first study to incorporate both of these factors into a simultaneous equations model within the energy-environment-growth nexus. The dependent variables in the system of three simultaneous equations are real gross domestic product (GDP), energy consumption and CO₂ emissions as a proxy for air pollution. The results have two important implications. First, they document a bidirectional causal relationship between GDP and energy consumption but do not provide support for the environmental Kuznets curve (EKC) hypothesis. This is revolutionary in the sense that it indicates that high-income and upper-middle-income countries base their economic growth on a feedback relationship with energy consumption and that the ensuing pollution has not yet reached a maximum point, even in these countries. Second, by implying that climate and weather variations are more important determinants of energy consumption and CO₂ emissions than corruption, the results suggest that changes in institutional quality are likely to have only a limited impact on energy and environmental policies.     

What is driving CO2 emissions in a typical manufacturing center of South China? The case of Jiangsu Province

Investigating CO₂ emissions of China's manufacturing centers contributes to local and global CO₂ mitigation targets. This study considers Jiangsu Province as a representation of manufacturing centers in South China. Effects of material efficiency improvements, technology development, consumption structure changes and consumption volume growth in Jiangsu Province on its CO₂ emissions during 1997–2007 are investigated using structural decomposition analysis based on environmental input–output table. In order to reduce CO₂ emissions, Jiangsu Province should not only rely on material efficiency improvements and technology development, but also rely on consumption structure changes. For consumption structure changes in detail, Jiangsu Province should not only focus on fixed capital formation and urban residential consumption, but also focus on international and intranational imports and exports. For the implementation of material efficiency improvements and technology development, Jiangsu Province should focus on technology innovation and international technology transfer. For the implementation of consumption structure changes, Jiangsu Province should mainly focus on identified sectors for each separate final demand category: five sectors for urban residential consumption, three sectors for fixed capital formation, four sectors for international exports, five sectors for intranational exports, three sectors for international imports and four sectors for intranational imports.     

On the relationships between CO2 emissions,energy consumption and income: The importance of time variation

The environment that governs the relationships between energy consumption, carbon dioxide (CO₂) emissions and gross domestic product (GDP) in the G7 countries changes over time due to variations in economic growth, regulatory policy and technology. Using a novel approach that may detect causalities when the time-constant hypothesis is rejected, we find significant time-varying Granger causalities among the variables under consideration. There is bidirectional causality between GDP and energy consumption for Japan, unidirectional causality running from GDP to energy consumption for Italy, and unidirectional causality running from energy consumption to GDP for the resource country Canada. Moreover, the results also show a bidirectional time-varying causality between energy consumption and CO₂ emissions for the United States, and causality from energy consumption to CO₂ emissions for France. Finally, while we find significant time-varying causalities running from GDP to CO₂ emissions for Italy and Japan, the finding of inverted N-shaped curves (Italy and Japan) lends no support to the traditional Environmental Kuznets Curve (EKC) hypothesis for these countries. It implies that environmental policy and economic growth should go hand in hand. Other policy implications of the empirical results have been proposed.     

CO2 emissions,energy consumption and economic growth nexus in MENA countries: Evidence from simultaneous equations models

This paper examines the nexus between CO₂ emissions, energy consumption and economic growth using simultaneous-equations models with panel data of 14 MENA countries over the period 1990–2011. Our empirical results show that there exists a bidirectional causal relationship between energy consumption and economic growth. However, the results support the occurrence of unidirectional causality from energy consumption to CO₂ emissions without any feedback effects, and there exists a bidirectional causal relationship between economic growth and CO₂ emissions for the region as a whole. The study suggests that environmental and energy policies should recognize the differences in the nexus between energy consumption and economic growth in order to maintain sustainable economic growth in the MENA region.     

Grey relation performance correlations among economics,energy use and carbon dioxide emission in Taiwan

This study explores the inter-relationships among economy, energy and CO₂ emissions of 37 industrial sectors in Taiwan in order to provide insight regarding sustainable development policy making. Grey relation analysis was used to analyse the productivity, aggregate energy consumption, and the use of fuel mix (electricity, coal, oil and gas) in relation to CO₂ emission changes. An innovative evaluative index system was devised to explore grey relation grades among economics, energy and environmental quality. Results indicate that a rapid increase in electricity generation during the past 10 years is the main reason for CO₂ emission increase in Taiwan. The largest CO₂ emitting sectors include iron and steel, transportation, petrochemical materials, commerce and other services. Therefore, it is important to reduce the energy intensity of these sectors by energy conservation, efficiency improvement and adjustment of industrial structure towards high value-added products and services. Economic growth for all industries has a more significant influence, than does total energy consumption, on CO₂ emission increase in Taiwan. It is also important to decouple the energy consumption and production to reduce the impacts of CO₂ on economic growth. Furthermore, most of the sectors examined had increased CO₂ emissions, except for machinery and road transportation. For high energy intensive and CO₂ intensive industries, governmental policies for CO₂ mitigation should be directed towards low carbon fuels as well as towards enhancement of the demand side management mechanism, without loss of the nation's competitiveness.     

Environmental consequences of tourism: do oil-exporting countries import more CO2 emissions?

ABSTRACT

The study explores the impact of international tourism on consumption-based CO₂ emissions in the case of Azerbaijan for the period of 1995–2013. The results of the long-run estimations revealed that the relationship between CO₂ emissions and international tourism revenues is N-shaped. This finding also indicates that the EKC hypothesis does not hold in the case of Azerbaijan. The found curvature of the relationship and the positive impact of tourism on CO₂ emissions are in line with the expectations, considering the developing path of the country. Moreover, the impacts of imports and exports are found to be positive and negative, respectively, which are in line with the expectations and with the theoretical findings discussed in the theoretical framework section. The positive impact of tourism and the higher impact of imports highlights the importance of utilizing the environmentally friendly policies in tourism activities as well as in international trade relations.     

Electricity sector reforms in four Latin-American countries and their impact on carbon dioxide emissions and renewable energy

This paper analyzes carbon dioxide (CO₂) emissions related to energy consumption for electricity generation in four Latin-American countries in the context of the liberalization process. From 1990 to 2006, power plants based on renewable energy sources decreased its share in power installed capacity, and the carbon index defined as CO₂ emission by unit of energy for electricity production stayed almost constant for all countries with the exception of Colombia, where the index reduced due to increase in hydroelectricity generation in the last years. The paper also presents a new set of policies to promote renewable energy sources that have been developed in the four countries. The paper concludes that restructuring did not bring about environmental benefits related to a decrease in CO₂ emissions because this depend on the existence of committed policies, and dedicated institutional and regulatory frameworks.     

Environmental Kuznets Curve hypothesis in Pakistan: Cointegration and Granger causality

The paper is an effort to fill the gap in the energy literature with a comprehensive country study of Pakistan. We investigate the relationship between CO₂ emissions, energy consumption, economic growth and trade openness in Pakistan over the period of 1971–2009. Bounds test for cointegration and Granger causality approach are employed for the empirical analysis. The result suggests that there exists a long-run relationship among the variables and the Environmental Kuznets Curve (EKC) hypothesis is supported. The significant existence of EKC shows the country's effort to condense CO₂ emissions and indicates certain achievement of controlling environmental degradation in Pakistan. Furthermore, we find a one-way causal relationship running from economic growth to CO₂ emissions. Energy consumption increases CO₂ emissions both in the short and long runs. Trade openness reduces CO₂ emissions in the long run but it is insignificant in the short run. In addition, the change of CO₂ emissions from short run to the long span of time is corrected by about 10% yearly.     

India’s energy needs and low carbon options

India’s aspiration for economic growth has consequences for energy growth and CO₂ emissions. This paper examines India’s need for energy with 20 year perspectives. From an earlier paper by K. Parikh et al. (2009), demand scenario are examined from the supply perspectives ranging from coal, hydrocarbon, nuclear, hydrogen, hydro and other renewable etc. None of these are substantial and India will have to rely on imports. The need for energy has to be reduced by a drive for energy efficiency and renewable energy. Government programmes for the above are also commented upon. Though India’s CO₂ emissions are unlikely to grow very much due to energy scarcity and energy mix the article examines the potential to reduce CO₂ emissions and the associated costs involved in various options. It finds that 30% reduction in CO₂ emissions by 2030 is feasible but would involve additional costs. The most promising option is to reduce energy demand by various measures to increase energy use efficiency in production and consumption.     

Economic growth,energy conservation and emissions reduction: A comparative analysis based on panel data for 8 Asian-Pacific countries

This study was conducted to evaluate the causality between energy consumption, GDP growth and carbon emissions for eight Asia-Pacific countries from 1971 to 2005 using the panel data. The results indicate that there are long-run equilibrium relationships between these variables. Additionally, causality from energy consumption to CO₂ emissions was observed generally, but there were some opposite relationships also. Parameter estimations of the panel data model indicate that there are great differences in the carbon emissions, the efficiencies of energy use, carbon emissions of unit GDP and unit energy consumption between developed and developing countries. The base carbon emissions, per capita energy consumption and efficiency of energy use in developing countries are far lower than in developed countries; however, the CO₂ emissions per unit of energy use is higher. Although developing countries may reduce their CO₂ emission per unit energy use, total energy consumption will rise rapidly with economic development. Thus, developing countries must determine how to undergo economic growth while conserving energy and reducing emissions. To respond to global climate change, it is necessary to develop innovative technology for energy use, transform the energy structure and conduct the clean development mechanism.     

Environmental Kuznets curve for CO2 emissions: The case of Arctic countries

The main new contribution of this paper is to examine the Environmental Kuznets curve (EKC) hypothesis using time series data at individual country levels. Empirical focus is on the assessment of income per capita on CO₂ emissions in the Arctic countries by taking into account the role of energy consumption. An autoregressive distributed lag (ARDL) modeling approach to cointegration is applied to annual data for the period 1960–2010. The results provide little evidence of the existence of the EKC hypothesis for the Arctic countries. We also find that economic growth has a beneficial effect on the environment only in some Arctic countries. Finally, energy consumption is found to have a detrimental effect on the environment in most countries.     

Multivariate granger causality between electricity consumption,exports and GDP: Evidence from a panel of Middle Eastern countries

This paper examines the causal relationship between electricity consumption, exports and gross domestic product (GDP) for a panel of Middle Eastern countries. We find that for the panel as a whole there are statistically significant feedback effects between these variables. A 1 per cent increase in electricity consumption increases GDP by 0.04 per cent, a 1 per cent increase in exports increases GDP by 0.17 per cent and a 1 per cent increase in GDP generates a 0.95 per cent increase in electricity consumption. The policy implications are that for the panel as a whole these countries should invest in electricity infrastructure and step up electricity conservation policies to avoid a reduction in electricity consumption adversely affecting economic growth. Further policy implications are that for the panel as a whole promoting exports, particularly non-oil exports, is a means to promote economic growth and that expansion of exports can be realized without having adverse effects on energy conservation policies.     

Environment Kuznets curve for CO2 emissions: A cointegration analysis for China

This study examines the long-run relationship between carbon emissions and energy consumption, income and foreign trade in the case of China by employing time series data of 1975–2005. In particular the study aims at testing whether environmental Kuznets curve (EKC) relationship between CO₂ emissions and per capita real GDP holds in the long run or not. Auto regressive distributed lag (ARDL) methodology is employed for empirical analysis. A quadratic relationship between income and CO₂ emission has been found for the sample period, supporting EKC relationship. The results of Granger causality tests indicate one way causality runs through economic growth to CO₂ emissions. The results of this study also indicate that the carbon emissions are mainly determined by income and energy consumption in the long run. Trade has a positive but statistically insignificant impact on CO₂ emissions.     

The role of trade and FDI for CO2 emissions in Turkey: Nonlinear relationships

This paper examines the effects of foreign trade and foreign direct investment (FDI) on CO₂ emissions in Turkey. We consider linear and nonlinear ARDL models and find significant asymmetric effects of exports, imports and FDI on CO₂ emissions per capita. However, FDI has no statistically significant long-run effects. In the long run, decreases in exports reduce CO₂ emissions per capita but increases in exports have no statistically significant effects. Increases in imports push up CO₂ emissions per capita, while decreases in imports have no long-run effects. On the other hand, CO₂ intensity, which measures CO₂ emissions per unit of energy, is not influenced by exports and imports, nor by FDI. Instead, it is affected positively by financial development and urbanization. Also, we find that an environmental Kuznets curve is present for both CO₂ measures so that increases in real GDP per capita have led to reductions in CO₂ emissions for at least the most recent decade, controlling for other confounding factors. Furthermore, the sectoral shares of CO₂ emissions in total CO₂ emissions change asymmetrically with foreign trade for two of four sectors, with export increases leading to lower CO₂ shares and imports having the opposite effect.     

Multivariate Granger causality between CO2 emissions, energy consumption, FDI (foreign direct investment) and GDP (gross domestic product): Evidence from a panel of BRIC (Brazil, Russian Federation, India, and China) countries

This paper addresses the impact of both economic growth and financial development on environmental degradation using a panel cointegration technique for the period between 1980 and 2007, except for Russia (1992-2007). In long-run equilibrium, CO₂ emissions appear to be energy consumption elastic and FDI inelastic, and the results seem to support the Environmental Kuznets Curve (EKC) hypothesis. The causality results indicate that there exists strong bidirectional causality between emissions and FDI and unidirectional strong causality running from output to FDI. The evidence seems to support the pollution haven and both the halo and scale effects. Therefore, in attracting FDI, developing countries should strictly examine the qualifications for foreign investment or to promote environmental protection through the coordinated know-how and technological transfer with foreign companies to avoid environmental damage. Additionally, there exists strong output-emissions and output-energy consumption bidirectional causality, while there is unidirectional strong causality running from energy consumption to emissions. Overall, the method of managing both energy demand and FDI and increasing both investment in the energy supply and energy efficiency to reduce CO₂ emissions and without compromising the country’s competitiveness can be adopted by energy-dependent BRIC countries.