Slowing down of globalization and global CO2 emissions – A causal or casual association?

In recent years we have witnessed slowdowns of both globalization and global CO₂ emissions. Not only have Organization for Economic Co-operation and Development (OECD) economies, such as the US and the UK, tried to bring manufacturing back to their home countries but non-OECD economies, such as China and India, have also increased their shares of domestic products at both intermediate and final goods. In this paper, we employ the annual global multi-regional input–output tables compiled by the Asian Development Bank to explore the linkage of the recent slowdown in globalization and global CO₂ emissions for the period 2012–2016. Our results suggest that there are indeed some clues indicating a slowdown of globalization in several leading OECD and non-OECD economies. However, the changes of consumption in non-OECD economies are much larger than are those in OECD economies. At the aggregate level, the effects of globalization on emissions have been dominated by non-OECD economies (in particular China and India), showing a negative linkage. More specifically, the changing pattern of globalization has contributed a net increase of 202 Mt. in global CO₂ emissions. The recent slowdown of global CO₂ emissions cannot, in general, be attributed to the slowdown of globalization.     

The effect of CO2 emissions and economic performance on hydrogen-based renewable production in 35 European Countries

This study applies the OLS and panel data approach to estimate the influence of variables such as greenhouse gas emissions, per capita income, the scale of labor force input, the portion of added value in manufacturing industry and government mechanism on hydrogen-based renewable production in 35 European countries. The empirical results show that the nation's economic input and its income level have a positive effect on hydrogen-based renewable energy, which indicated that the economic growth has promoted living standards, inspired environmental awareness, and influenced the use of alternative energy and renewable energy. Moreover, the empirical results also show that deepening democracy (government mechanism) has a positive impact on hydrogen-based renewable energy in OECD countries, but the impact on non-OECD countries is not clear.     

Growth and renewable energy in Europe: Benchmarking with data envelopment analysis

This paper conducts data envelopment analysis (DEA) for the purpose of calculating inefficiencies in the European countries' growth using as main inputs the variables typically used in the growth-energy literature nexus such as energy consumption, carbon emissions, employment and capital but also with a particular focus on renewable energy sources (RES) consumption. Since we have a panel data set, we also apply the Malmquist method to calculate total factor productivity and an analysis of peers. Mean overall efficiency has been calculated to be equal to 0.892, while mean pure technical efficiency is 0.569 and scale efficiency 1.798. Countries with remarkable renewable energy performance have medium to low efficiency, while renewable energy laggards are among the most technically efficient countries in Europe. Results from this paper are useful for monitoring and benchmarking purposes with respect to their 2020 renewable energy obligations stemming from 2009/28/ED Directive.     

Long-term trends of electric efficiencies in electricity generation in developing countries

This analysis provides time-series data on electric efficiencies for 138 countries and regions, covering all fossil fuels for the period 1971–2005, with an emphasis on non-Organization for Economic Cooperation and Development (OECD) countries. Fossil fuel consumption for electricity generation in non-OECD countries now exceeds that in the OECD. The historical performance of the top five non-OECD consumers of each fossil fuel for which reliable data are available is presented and discussed. For each fuel, the countries that lead the world in efficiency are used for benchmarks; bringing the rest of the world up to these standards would result in energy savings of 26 EJ (equivalent to 5% of global energy consumption) and CO₂ emissions reduction of 2.1 Pg (equivalent to 8% of global CO₂ emissions). Coal showed the largest potential margin of improvement for both energy and CO₂, with possible savings equivalent to 3% of current global energy consumption and 5% of global CO₂ emissions. The gap in electric efficiency between OECD and non-OECD countries over the past 35 years has widened for coal-fired generation, stayed relatively constant for natural gas, but has shrunk for petroleum. The results show the very gradual nature of overall efficiency improvements and the significant differences among regions and countries.     

Renewable and non-renewable energy consumption and economic activities: Further evidence from OECD countries

This article examines the dynamic relationship between renewable and non-renewable energy consumption and industrial output and GDP growth in OECD countries using data over the period of 1980–2011. The panel cointegration technique allowing structural breaks is used for empirical investigation. The results show that there is a long-term equilibrium relationship among non-renewable and renewable energy sources, industrial output and economic growth. The panel causality analyses show bidirectional causality between industrial output and both renewable and non-renewable energy consumption in the short and long run. However, there is evidence of bidirectional short-run relationship between GDP growth and non-renewable energy consumption while unidirectional causality between GDP growth and renewable energy consumption. These results indicate that OECD economies still remain energy-dependent for their industrial output as well as overall economic growth. However, expansion of renewable energy sources is a viable solution for addressing energy security and climate change issues, and gradually substituting renewable to non-renewable energy sources could enhance a sustainable energy economy.     

Filling the gaps: Policy supports and interventions for scaling up renewable energy development in Small Island Developing States

SIDS have both opportunities and challenges – economic, social and environmental vulnerability – for low carbon development. Economically, they are highly dependent on international trade; they have limited domestic markets, too small to provide significant scale economies; their exports are constraint by their isolation and remote location. We provide an overview of current energy situation in SIDS, their goals to adopt low carbon economic development paths, policies already in place or required to achieve the goals and challenges to implement their plans and strategies. The focus is on energy policy landscape that needs to be addressed in order to scale-up renewable energy technologies needed to stimulate low carbon economic growth. We find that SIDS face four key barriers to renewable energy development: information to improve the energy information network by strengthening existing information systems and building awareness of renewable energy; financing mechanisms for renewable energy projects, including regional loan structures and technical assistance to banks; policy supports to implement regulatory frameworks that enable renewable energy development; and building technical capacity among players in the renewable energy field. We recommend “policy enablers” that underlie what could positively impact on renewable energy goals and more broadly energy efficiency and climate change.     

Coordinating technological progress and environmental regulation in CO2 mitigation: The optimal levels for OECD countries & emerging economies

As technological progress and environmental regulation are not only important drivers of but also the double-edged swords in mitigation of CO₂ emissions, it is important to figure out their optimal threshold values for CO₂ emissions' reduction. This paper employs the panel smooth transition regression technique to explore these optimal values in the case of OECD countries and emerging economies. The results show that: (1) OECD countries are at a level of excessive technological progress, which will have a rebound effect and increase CO₂ emissions. (2) Emerging economies are under a strict level of environmental regulation, which will lead to serious ‘green paradox’ effects and harm the economic development. Moreover, they have great potential to achieve CO₂ emissions reduction targets through technological progress. (3) Due to the rebound effect, the concentration of environment-related technologies should be shifted from improving energy efficiency to reducing carbon emissions directly such as capture, storage, sequestration or disposal of greenhouse gases. (4) OECD countries should provide low-carbon technical support to emerging economies. In addition, because of the existence of heterogeneity, OECD countries ought to determine their levels of technological progress and environmental regulation according to their own actual conditions.     

Efficiency-improving fossil fuel technologies for electricity generation: Data selection and trends

This paper studies patenting dynamics in efficiency improving electricity generation technologies as an important indicator of innovation activity. We build a novel database of worldwide patent applications in efficiency-improving fossil fuel technologies for electricity generation and then analyse patenting trends over time and across countries. We find that patenting has mostly been stable over time, with a recent decreasing trend. OECD countries represent the top innovators and the top markets for technology. Some non-OECD countries, and particularly China, are also very active in terms of patenting activity in this sector. The majority of patents are first filed in OECD countries and only then in BRIC and other non-OECD countries. BRIC and other non-OECD countries apply for patents that are mostly marketed domestically, but BRIC countries represent important markets for patent duplication of OECD inventions. These results are indicative of significant technology transfer in the field of efficiency-improving technologies for electricity production.     

Lessons learned from studying public initiatives to support energy efficiency finance in Thailand from 1992 to 2014

Despite the huge technical and market potential for cost-effective energy efficiency investments in Southeast Asian markets, only a small fraction of this potential has been realised. Given that the major share of global future energy demand, and associated greenhouse gas emissions, will come from emerging economies, it is important to understand the barriers to mainstreaming energy efficiency into the financial sector. This paper focuses on public initiatives that support one of the main barriers: access to capital. The researchers chose Thailand as a case study because of the range of energy efficiency finance programmes that have been designed and implemented since the early 1990s. Interviews with 21 experts from government, the private sector and academia provided the core data for this research. The analysis employed a multi-level perspective and focused on the historical evolution of public support of energy efficiency finance in the country. We identified three distinct phases of public policy development over the past two decades. Despite an impressive variety of ambitious and creative programmes, the initiatives have not yet succeeded in integrating energy efficiency into the financial sector in a meaningful way. Some of the key lessons found are that (a) it is better to treat energy efficiency and renewable energy in separate financing initiatives, (b) governments find it challenging to design effective mechanisms to de-risk financial investments, and (c) international organisations play an important role in testing and facilitating the introduction of new financing approaches and mechanisms. In emerging economies, cost-effective implementation of energy efficiency measures is a promising alternative that can reduce the need for investment in large-scale power generation capacity. The researchers hope that this paper will contribute to more effective design of programmes to incentivise energy efficiency financing in Thailand and in other economies in Southeast Asia.     

Roles and potentials of renewable energy in less-developed economies: The case of Nepal

Increasing the share of renewable energy in the national energy mix remains one of the major energy policy goals across many economies. This paper assesses the roles and potentials of renewable energy sources in less-developed economies while citing Nepal as an example. Renewable energy has a significant role to play in the electrification of rural areas in developing economies and contribute towards sustainable development. Realizing full potentials of renewable, however, requires addressing both the associated demand-side and supply-side constraints. Innovative subsidies and tax incentives, adequate entrepreneurial support, strengthening institutional arrangement and promoting local community-based organizations such as the cooperatives are the necessary factors in promoting the green technologies in countries like Nepal. International factors such as large scale investment and adequate technology transfer are equally crucial to create a rapid spread and increase affordability of decentralized renewable energy technologies in less-developed economies.     

Financing clean energy projects through domestic and foreign capital: The role of political cooperation among the EU,the G20 and OECD countries

There is a growing concern among both individuals and policy makers in relevance to increasing CO₂ emissions across the world. As a result, international organizations have started to pressurize economies to minimize their carbon emissions by increasing the share of clean energy consumption in total energy use. Hence, the goal of this paper is to empirically explore to what extent both domestic (stock market) and foreign (FDI inflows) capital affect clean energy uses across the EU, the G20, and OECD, spanning the period 1993–2012. The results of long-run elasticities document that both FDI and stock market developments play a significant role in promoting clean energy uses across all three-country groups. The results also suggest that clean energy consumption has a considerable positive and negative effect on economic output and CO₂ emissions, respectively, while the political globalization has a substantial negative impact on carbon emissions across the EU, the G20 and OECD economies.     

The impact of renewable energy consumption to economic growth: A replication and extension of

This study replicates and extends the results presented in a top-cited article in this journal, Inglesi-Lotz (2016), which analyzes the impact of renewable energy consumption to economic growth for the OECD countries by applying the ordinary least squares with fixed effect estimator on the data from 1990 to 2010. By using the same data and methods, this study first produces and compare empirical results with those reported in the original article. Then, it applies a set of new econometric methods on the same data to address heterogeneity in renewable energy and economic growth across the analyzed group of countries. The panel quantile regression estimation shows that the effect of renewable energy consumption on economic growth is positive for lower and low-middle quantiles; however, its effect becomes negative for middle, high-middle, and higher quantiles when renewable energy consumption is proxied by the absolute value. Furthermore, a negative impact of renewable energy on economic growth is observed in almost all quantiles when it is proxied by the share of renewable energy consumption to total energy consumption. These results greatly differ from those of the original study     

A note on the environmental Kuznets curve for CO2: A pooled mean group approach

This paper investigates whether the environmental Kuznets curve (EKC) hypothesis for CO₂ emissions is satisfied using the panel data of 28 countries by taking nuclear energy into account. Using the pooled mean group (PMG) estimation method, our main results indicate that (1) the impacts of nuclear energy on CO₂ emissions are significantly negative, (2) CO₂ emissions actually increase monotonically within the sample period in all cases: the full sample, OECD countries, and non-OECD countries, and (3) the growth rate in CO₂ emissions with income is decreasing in OECD countries and increasing in non-OECD countries.     

Crude oil shocks and stock markets: A panel threshold cointegration approach

This paper proposes a panel threshold cointegration approach to investigate the relationship between crude oil shocks and stock markets for the OECD and non-OECD panel from January 1995 to December 2009. Nonlinear cointegration is confirmed for the oil–stock nexus in the panel. Because threshold cointegration is found, the threshold vector error correction models can be run to investigate the presence of asymmetric dynamic adjustment. The Granger causality tests demonstrate the existence of bidirectional long-run Granger causality between crude oil shocks and stock markets for these OECD and non-OECD countries. However, the short-run Granger causality between them is bidirectional under positive changes in the deviation and unidirectional under negative ones. Moreover, the speed of adjustment toward equilibrium is faster under negative changes in the deviation than that under positive ones in these OECD and non-OECD countries.     

Capital-energy substitution in manufacturing for seven OECD countries: learning about potential effects of climate policy and peak oil

The simultaneous influence of increasing oil scarcity, greenhouse gas control and renewable energy targets will result in a future of sustained energy prices. Whether modern economies can find a smooth path away from fossil fuels is a fundamental socio-economic and political question, which according to standard economics depends to a large extent on the degree of substitution between energy and capital. We study this issue by modelling the manufacturing sector with a translog cost function in seven OECD countries using the EU-KLEMS database for the period 1970–2005. After a literature survey, different production structures accounting for input substitution, returns to scale and technical change are estimated, and substitution elasticities are derived. Our results indicate a general complementarity or weak substitution relationship between energy and capital, suggesting that an increase in energy price, e.g. due to climate policy or scarcer fossil fuels, will likely reduce capital inputs, which might lead to a lower output of manufacturing.     

Analysis of energy use and CO2 emission in service industries: Evidence from Sweden

This study analyses the trends in energy use and CO₂ emissions for 19 sub-sectors in the Swedish service sectors following the classification of the International Standard Industrial Classification of all Economic Activities (ISIC) at the 2-digit level of aggregation over the period 1993–2008. This empirical study intends to examine energy use, energy efficiency and CO₂ emissions using data envelopment analysis (DEA) and panel data techniques. DEA is applied to assess energy efficiency within a production framework. Panel data techniques are used to determine which variables influence energy efficiency. The results show that Swedish services industries have increased energy consumption and CO₂ emissions in the period 1993–2008. The results from the DEA show significant variation in energy efficiency across service industries. The results also indicate that this sector has increased technical efficiency and energy efficiency while decreasing CO₂ emissions, especially in the later years of our sample period. The results of panel data techniques show that higher energy taxes, electricity consumption, investments and labour productivity generate higher energy efficiency, while higher fossil fuel consumption leads to lower energy efficiency. All findings of this study are important for developing effective energy policies that encourage better energy use and energy management in the service industries.     

Renewable energy consumption and income in emerging economies

Increased economic growth and demand for energy in emerging economies is creating an opportunity for these countries to increase their usage of renewable energy. This paper presents and estimates two empirical models of renewable energy consumption and income for a panel of emerging economies. Panel cointegration estimates show that increases in real per capita income have a positive and statistically significant impact on per capita renewable energy consumption. In the long term, a 1% increase in real income per capita increases the consumption of renewable energy per capita in emerging economies by approximately 3.5%. Long-term renewable energy per capita consumption price elasticity estimates are approximately equal to −0.70.     

An integrated DEA PCA numerical taxonomy approach for energy efficiency assessment and consumption optimization in energy intensive manufacturing sectors

This paper introduces an integrated approach based on data envelopment analysis (DEA), principal component analysis (PCA) and numerical taxonomy (NT) for total energy efficiency assessment and optimization in energy intensive manufacturing sectors. Total energy efficiency assessment and optimization of the proposed approach considers structural indicators in addition conventional consumption and manufacturing sector output indicators. The validity of the DEA model is verified and validated by PCA and NT through Spearman correlation experiment. Moreover, the proposed approach uses the measure-specific super-efficiency DEA model for sensitivity analysis to determine the critical energy carriers. Four energy intensive manufacturing sectors are discussed in this paper: iron and steel, pulp and paper, petroleum refining and cement manufacturing sectors. To show superiority and applicability, the proposed approach has been applied to refinery sub-sectors of some OECD (Organization for Economic Cooperation and Development) countries. This study has several unique features which are: (1) a total approach which considers structural indicators in addition to conventional energy efficiency indicators; (2) a verification and validation mechanism for DEA by PCA and NT and (3) utilization of DEA for total energy efficiency assessment and consumption optimization of energy intensive manufacturing sectors.     

Effects of financial development on energy consumption: The role of country risks

This study explores the impacts of country risks on the relationship between energy consumption and financial development for 79 countries. By using the panel smooth transition regression model, this study finds non-linear relationships between variables - that is, the relationships differ in higher and lower risk environments. We show that banking sector development has larger impacts on energy consumption than does stock market development. The results of the full sample show under the stable country risk environments that financial development could help to reduce energy consumptions. Lastly, the results offer that different types of financial development and country risk environments have varying impacts on energy consumption in OECD and non-OECD countries.     

Drivers for renewable energy: A comparison among OECD countries

The difference in the shares of renewable energy in total primary energy supply among OECD countries is immense. We attempt to identify some key factors that may have driven this difference for renewable energy in general and bioenergy in particular. We found that besides country-specific factors, gross national product (GDP) and renewable energy and bioenergy market deployment policies have significant and positive impacts on the per capita supply of both renewable energy and bioenergy in OECD countries. R&D expenditures, energy prices, CO₂ emissions, and other energy policies are statistically insignificant in terms of their impact on renewable energy and bioenergy supply. However, this does not necessarily mean that they are not potential drivers for renewable energy and bioenergy, but rather suggests that their magnitudes have not been big enough to significantly influence energy supply based on the historical data from 1994 to 2003. These findings lead to useful policy implications for countries attempting to promote renewable energy and bioenergy development.