Environmental policy stringency,renewable energy consumption and CO2 emissions: Panel cointegration analysis for BRIICTS countries

ABSTRACT

The aim of this paper is to investigate the relationship between environmental policy stringency and CO₂ emissions in BRIICTS (Brazil, Russia, India, Indonesia, China, Turkey and South Africa) for the period 1993–2014 after controlling for renewable energy, fossil energy, oil prices and income. We believe that this is the first attempt to use the recently OECD-developed environmental policy stringency index to test the effectiveness of environmental stringency policy in reducing CO₂ emission in these countries. Applying the Panel Pooled Mean Group Autoregressive Distributive Lag (PMG-ARDL) estimator, we found an inverted U–shaped relationship between environmental policy stringency and CO₂ emissions. This suggests that initially strict stringent environmental policy does not lead to improvements in the environment but after a certain level or a threshold point, environmental stringency policy leads to improvement in environmental quality. Renewable energy consumption was negatively related to CO₂ emissions while fossil energy consumption and real oil prices and income were positively and significantly related to CO₂. Our findings suggest that strengthening the stringency of environmental policies and promoting renewable energy are effective ways of preventing environmental degradation in BRIICTS countries.     

The decline of environmental degradation by renewable energy consumption in the MERCOSUR countries: an approach with ARDL modeling

The impact of consumption of renewable energy on CO₂ emissions was investigated, in five MERCOSUR’s countries from 1980 to 2014. The autoregressive distributed lag (ARDL) in the form of Unrestricted Error Correction Model to decompose the total effect of variables into it is the short- and long-run components. The results of preliminary tests showed the presence of cross-sectional dependence between the variables, the stationarity of all variables in the first differences, and the homogeneity in panel data. Moreover, the specification tests pointed to the presence of cross-sectional dependence, non-correlation between the crosses, serial correlation in the panel data model, and the existence of heteroskedasticity. The results of semi-elasticities (short run) and elasticities (long run) of ARDL model pointed that the economic growth and consumption of fossil fuels increase the CO₂ emissions in the short and long run, while the consumption of renewable energy reduces them. Despite the consumption of renewable energy reducing the environmental degradation in the MERCOSUR countries, its impact is small. Finally, this study proved that the consumption of renewable energy is able to reduce the CO₂ emissions, which is responsible for the environmental degradation in the MERCOSUR countries, and that the economic growth of these same countries increases the CO₂ emissions, along with the fact that all MERCOSUR countries are highly dependent of fossil fuels.     

Panel heterogeneous distribution analysis of trade and modernized agriculture on CO2 emissions: The role of renewable and fossil fuel energy consumption

In line with the global target of reducing climate change and its impact, this study explored the causal relationship between CO₂ emissions, modernized agriculture, trade openness, aggregate and disaggregate energy consumption in 14 African countries from 1990–2013 using a panel quantile estimation procedure. The empirical results showed that value addition to agricultural commodities declines CO₂ emissions in countries with high pollution levels. The study revealed a positive nexus between CO₂ emissions and energy consumption homogeneously distributed across quantiles. Trade openness was found to lower CO₂ emissions in countries with lower and higher levels of environmental pollution. While fossil fuel energy consumption was found to exacerbate CO₂ emissions, renewable energy consumption confirmed its mitigating effect on environmental pollution. The institution of climate‐smart agricultural options will sustainably increase productivity and income while adapting to climate change by reducing greenhouse gas emissions. Diversification of energy technologies with clean and modern energy sources like renewables avoid the over‐dependence on fossil fuels for agricultural purposes. Trade policies can stimulate flows of technology and investment opportunities for specialization in production and economies of scale. Hence, the consideration of policies that boost agricultural sector productivity and create an efficient market for international trade in Africa will help in improving livelihoods.     

Heterogeneous effects of urbanization and environment Kuznets curve hypothesis in Africa

This work explores the heterogeneous effect of urbanization and nonrenewable energy consumption on the environment in 54 African nations. Panel data were used from 1996 to 2019. For estimation, panel quantile regression analysis, augmented mean group, panel threshold regression, and the environment Kuznets curve hypothesis were applied to check the relationship between income and carbon emissions. The study's outcome demonstrates that urbanization and nonrenewable energy consumption degrade the environment in Africa. Furthermore, an inverted U-shape relationship exists between economic growth and CO₂ emissions, confirming the environmental Kuznets curve hypothesis. The findings indicate that urbanization should be planned; otherwise, urbanization can cause environmental degradation. African countries must adopt green urbanization and use renewable energy and clean manufacturing technologies. The institutions are encouraged to execute the standard, regulatory environment, and policies to reduce carbon emissions. Countries throughout the African continent should actively respond to the issues by charting a separate and diverse route for urban development.     

How renewable energy and service growth influence environmental quality: Evidence from a sustainable development perspective

The present study inspects the relationships between the carbon dioxide (CO₂) emissions, real GDP, renewable and non-renewable energy consumption, as well as the service growth for top ten countries (TTC) in service activities. The empirical modeling used in the study involves the procedures of cointegration and tests of Granger causality to inspect the dynamic interaction between the variables during the period from 1980 to 2018. The results of the present study suggest that the variables are cross-sectionally dependent. In addition, the variables appear to be cointegrated based on several tests. The long-run outcomes revealed an inversed U-shaped form between emissions-GDP proving the validity of the environmental Kuznets curve assumption. The fully modified ordinary least squares and dynamic OLS estimates show that the non-renewable energy and economic growth contribute to the increase of CO₂ emissions, while service value-added leads to decrease emissions. Furthermore, the renewable energy coefficient comes through as negative but insignificant for the selected panel. The TTC in service should stimulate the usage of renewable energy in various service events for following the path of sustainable development. Devising the investment plans associated with the use of renewable energies is quite essential for the advancement of the service sector leading to mitigating emissions portion.     

Disaggregated energy consumption,environment, and economic growth nexus of emerging South and East Asian Countries: An ARDL approach

This study examines the nexus between disaggregated energy consumption (EC), CO₂ emissions, and economic growth in emerging South and East Asian countries over the period of 1994 to 2019. The long-run equilibrium relationship is determined by using the “Autoregressive distributed lag (ARDL) model” and the “Generalized least square (GLS) technique.” The panel causality test developed by “Dumitrescu and Hurlin, 2012” determines the direction of causation between variables. Disaggregated EC and CO₂ emissions positively affect economic growth in the research. The PMG estimate also validates the GLS findings, which produce the same results as the PMG estimation. To check the robustness, we also use FMOLS and DOLS estimators. The results confirm the feedback hypothesis for South and East Asian nations regarding energy uses, CO₂ emissions, and economic growth. In contrast, there is unidirectional causality between industrial development and economic growth. These findings will help governments in South and East Asia craft effective energy policy regulations for their financial institutions.     

Income,environmental considerations,and sustainable energy consumption in Africa

Evidence on income as a crucial driver of renewable energy consumption in Africa is mixed. But hydropower accounts for over 90% of renewable energy in sub-Sahara Africa alone. Yet, empirical evidence suggests that hydropower may not be as environmentally sustainable as believed and, as a legacy source of energy in Africa, may not accurately reflect attitudes on renewable energy motivated by environmental concerns. This paper examines the role played by economic performance in the rising sustainable energy consumption in Africa, focusing on the renewable energy sources that are compatible with sustainable development. The difference generalized method of moments, fully modified ordinary least squares, and dynamic ordinary least squares are employed to estimate the statistical significance of income, environmental sustainability proxy, and prices as important drivers of sustainable energy consumption in a panel of 10 African countries for the period 2000–2011—a time frame characterized by a rapid rise in renewables as a priority in environmental policy. With timing and measurement considerations on sources of renewables, results indicate that in contrast to recent literature, the rise in sustainable energy consumption in Africa is strongly driven by rising domestic incomes. In line with literature, however, there is a generally positive, albeit statistically insignificant relationship between sustainable energy consumption and levels of carbon emissions. Oil prices in real terms also correlate with sustainable energy consumption. Available data also show that countries with low energy security also coincidentally tend to have high small hydropower capacity, providing potential for sustainably reducing energy insecurity.     

Nexus between renewable energy consumption,economic growth,and CO2 emissions in Algeria: New evidence from the Fourier-Bootstrap ARDL approach

Governments often impose new energy strategies to support new CO₂ emission-reducing technologies without affecting economic growth. Hence, this study aims to re-investigate the relationship between economic growth, renewable energy use, and CO₂ emissions in Algeria from 1990 to 2018. Motivated by the mixed findings of the existing literature, which ignore the Fourier function and bootstrap test and apply the newly developed Fourier bootstrap autoregressive distributed lag model (FARDL). Our findings indicate that renewable energy use and growth have a long-run relationship with CO₂ emissions and do not accept the existence of the Environmental Kuznets Curve (EKC) hypothesis for CO₂ emissions in Algeria. In the long term, the results show that renewable energy use has a negative and significant impact, and growth has a positive and statistically significant effect on CO₂ emissions. In the short run, the findings indicate that renewable energy use reduces CO₂ emissions, while both the growth and squared growth had positive and statistically insignificant impacts on CO₂ emissions, confirming the lack of evidence supporting the EKC hypothesis. Moreover, the causality test indicates a one-way causation from growth to renewable energy use, confirming the conservation hypothesis for Algeria and from growth to CO₂ emissions. Interestingly, we found one-way causality from CO₂ emissions to renewable energy use, attributing this to the fact that renewable energy usage has yet to reach a point that it can significantly cause a CO₂ emissions reduction. Based on the results, we recommend that policymakers design appropriate policies to decarbonize energy consumption, e.g., increasing fossil fuel costs and implementing a carbon tax. In contrast, Algeria should promote new CO₂ emission-reducing technologies without affecting economic growth, e.g., tax exemptions and reductions for enterprise owners in the renewable energy industry.     

The relationship among economic growth,CO<Subscript>2</Subscript> emissions,and energy use in the APEC countries: a panel VAR approach

The aim of this paper is to analyze the relationship among economic growth, carbon dioxide emissions, and energy use for 19 APEC countries over the 1960–2013 years. Using a panel VAR technique, a three-variable VAR is estimated. Empirical findings illustrate that no causal relationship emerges between real GDP and energy use. Thus, our empirical evidence is in line with the “neutrality hypothesis.” Moreover, panel cointegration tests show that a long-run equilibrium relationship is questionable for the APEC countries. Granger causality analyses confirm our previous results, since in nine countries any causal relationship between GDP and energy is found.     

Unveiling the liaison between human capital,trade openness,and environmental sustainability for BRICS economies: Robust panel-data estimation

Global warming and greenhouse gas emissions pose severe threats to environmental sustainability. A sustainable environment is a prerequisite for long-term socioeconomic growth and human survival. Green technology is brought about by a country's economic and financial openness, and education provides knowledge to the public and labor, contributing to environmental sustainability. Thus, this research aims to unveil the liaison between human capital, trade openness, and environmental quality for Russia, Brazil, India, China, and South Africa (BRICS) countries from 1998 to 2018. Several econometric methods, including the Driscoll–Kraay standard errors and the Dumitrescu–Hurlin causality approaches, reveal long-run and causal relationships among the modelled indicators. The Driscoll–Kraay standard error results show that human capital is negatively related to carbon dioxide emissions (CO₂ emissions). Imposing high tariffs and excise duties, changing tax structures, discouraging the inflow of polluted commodities, and encouraging green trade can help BRICS combat high environmental pollution. The results show that a one-point increase in human capital in models 1 and 2 can reduce CO₂ emissions by 1.5279 and 0.1538 points, respectively. In contrast, a 1% growth in trade can lead to a rise in CO₂ emissions of 0.3731% and 0.2384%, respectively. Similarly, financial development and energy consumption result in high CO₂ emissions in the long run. Moreover, a feedback effect of the human capital index on CO₂ emissions is discovered. As a result of the findings, the government and responsible authorities should provide financial support and encourage investments in the region's energy-resourceful and sustainable green projects.     

Toward a CO2 zero emissions energy system in the Middle East region

Climate change and energy security are global challenges requiring concerted attention and action by all of the world’s countries. Under these conditions, energy supplier and exporter countries in the Middle East region are experiencing further challenges, such as increasing domestic energy demand while energy exports have to concurrently be kept at high levels. Middle East countries process the largest proven oil and gas reserves in the world and contribute a large fraction of the world’s CO₂ emissions from the use of these as fuels both domestically and internationally. This paper addresses different policies that could dramatically change the future course of the Middle East region toward a zero CO₂ emission energy system. To this aim, an integrated energy supply–demand model has been developed to analyze required commitments including renewable energy and energy efficiency targets and the potential of nuclear power, all of which should need to be considered in order to reduce CO₂ emissions by 2100. The results indicate that nearly 43% of the global energy of the Middle East region can be supplied from non-fossil fuel resources in 2100.     

Toward sustainable use of natural resources: Nexus between resource rents,affluence, energy intensity and carbon emissions in developing and transition economies

Sustainable use of natural resources would entail ensuring that derived economic benefits today do not undermine the welfare of generations to come. On this basis, this study examines the nexus between natural resource rents and carbon dioxide (CO₂) emissions disaggregated into production and consumption-based (i.e., trade-adjusted) CO₂ emissions for a selected panel of 45 developing and transition economies over the period 1995–2017. The empirical model also incorporates the impacts of population, affluence, and energy intensity. The results show that affluence increases production-based CO₂ emissions by 1.407%, with the EKC's predicted inverted U-shaped curve only explaining consumption-based CO₂ emissions. Economic reliance on natural resource rents and energy intensification contribute 0.022% and 0.766%, respectively, to CO₂ emissions embedded in territorial production inventories and 0.035% and 0.583%, respectively, to CO₂ emissions embedded in consumption inventories. The bootstrap non-causality test shows that historical data on each variable has significant predictive power for future CO₂ emissions from both sources. The historical information about natural resource rents has significant predictive power over the future levels of affluence and energy intensity. Clearly, the results show that the environmental impact of natural resource rents is stronger when CO₂ emissions are adjusted for trade and varies among the countries, with Bangladesh, Guinea, India, Malaysia, Mexico, Nigeria, Pakistan, Saudi Arabia, Vietnam, and Zimbabwe among the most affected countries. Overall, this study provides motivation for policies to keep the use of natural resources within sustainable limits.     

Investigating the environmental Kuznets Curve and the role of green energy: Emerging and developed markets

In this study, the validity of the Environmental Kuznets Curve (EKC) hypothesis and the effect of green energy sources to decrease CO₂ emissions are examined for emerging and developed markets from 1990 to 2011 using a pooled mean group (PMG) estimator. Empirical findings of this study suggest that the EKC hypothesis is not confirmed by emerging markets; meanwhile, it is strongly supported by developed markets. The long-run elasticity results of per capita data may also imply a divergence between emerging markets and developed markets regarding CO₂ emissions. On the other hand, the findings of this study indicate that renewable energy sources will play an important role in reducing CO₂ emissions for both panel groups in the long run.     

CO2 capture and storage from a bioethanol plant: Carbon and energy footprint and economic assessment

Biomass energy and carbon capture and storage (BECCS) can lead to a net removal of atmospheric CO₂. This paper investigates environmental and economic performances of CCS retrofit applied to two mid-sized refineries producing ethanol from sugar beets. Located in the Region Centre France, each refinery has two major CO₂ sources: fermentation and cogeneration units. “carbon and energy footprint” (CEF) and “discounted cash flow” (DCF) analyses show that such a project could be a good opportunity for CCS early deployment. CCS retrofit on fermentation only with natural gas fired cogeneration improves CEF of ethanol production and consumption by 60% without increasing much the non renewable energy consumption. CCS retrofit on fermentation and natural gas fired cogeneration is even more appealing by decreasing of 115% CO₂ emissions, while increasing non renewable energy consumption by 40%. DCF shows that significant project rates of return can be achieved for such small sources if both a stringent carbon policy and direct subsidies corresponding to 25% of necessary investment are assumed. We also underlined that transport and storage cost dilution can be realistically achieved by clustering emissions from various plants located in the same area. On a single plant basis, increasing ethanol production can also produce strong economies of scale.     

A panel study on the relationship between biofuels production and sustainable development

Biomass is one of the renewable energy sources on which policy makers are greatly dependent on since it is a flexible feedstock capable of conversion into electricity, transport liquid fuels and heat by chemical and biological processes on demand. Though numerous publications have examined the relationship of economic growth with renewable energy and other parameters, biomass energy has never been included in these studies. Then, this study examines the causal relationship within a multivariate panel cointegration/error correction framework which combines the cross-section and time series data while allowing for heterogeneity across different provinces. After employing panel data regression model ranging from 2003 through 2012 to examine the relationships of biofuels production with sustainable development in China, the paper concludes that the development of biofuel energy production integrated with the consideration of the improvement of income per capita, and the attraction of more capital investment, does make a significant contribution to economic growth. However, some negative side effects including the increase of greenhouse emissions and the decrease of marginal land still coexist with the economic development. Of course, the importance of these findings lies on their implications and their adoption on strategic policies.     

Interactions between energy consumption,international trade,and real income in Canada: An empirical investigation from a new version of the Solow growth model

This study investigates the empirical relationship between energy consumption, international trade, and real income in Canada which has an important role in global energy and trade. It employs bound tests to level relationships and conditional error correction models through ARDL specification to a new version of the Solow Growth model. Using annual data of the 1960–2010 period, results reveal a long-term relationship between energy consumption, international trade, and real income in Canada. It is also found that energy exporting activity is the determinant (driver) of energy consumption through the channel of real income and energy consumption is the determinant (driver) of exports through the channel of real income in the long term of the Canadian economy. Exports and energy use are the determinants (drivers) of real income in the long term of the Canadian economy; therefore, as conditional Granger causality tests suggest there is feedback relationship between energy consumption, international trade, and real income in the long term of the Canadian economy. The present study suggests that any energy conservation policies are likely to have negative influence on output and international trade in Canada.     

Greening the Brazil,Russia, India,China and South Africa (BRICS) economies: Assessing the impact of electricity consumption,natural resources,and renewable energy on environmental footprint

Electricity consumption is a crucial factor in the environmental pollution process, and therefore, its impact needs to be carefully considered by policymakers. This study investigates the relationship between energy consumption, electricity generation, natural resource utilization, and environmental pollution in BRICS nations, which have a substantial share in global resource consumption. To this end, we employed a novel methodology, namely the Method of Moment Quantile Regression (MMQR), for the time period between 1990 and 2018, within the framework of the Environmental Kuznets Curve (EKC) theory. The study's outcome shows that natural resources and renewable energy are efficacious and significant in curbing environmental degradation among the sample countries. The investigation reveals a positive correlation between electricity consumption and environmental degradation, thereby highlighting this vital resource's role in exacerbating the BRICS nations’ ecological footprint. The findings from this research can provide crucial insights for policymakers to achieve sustainable development and carbon neutrality in these countries.     

Grey relation analysis of carbon dioxide emissions from industrial production and energy uses in Taiwan

This study aims to identify key factors affecting energy-induced CO₂emission changes from 34 industries in Taiwan, in order to have an integrated understanding of the industrial environmental-economic-energy performance and to provide insights for relevant policy making in Taiwan. Grey relation analysis was used in this paper to analyse how energy-induced CO₂emissions from 34 industries in Taiwan are affected by the factors: production, total energy consumption, coal, oil, gas and electricity uses. The methodology was modified by taking account of the evolutionary direction among relevant factors. Furthermore, tests of sensitivity and stability, which are seldom discussed in most grey relation analyses, were conducted to ensure the reliability of outcomes. We found that values ranging from 0·3 to 0·5 are appropriate, and the analytical results with value of 0·5 offer moderate distinguishing effects and good stability. Results indicate that industrial production has the closest relationship with aggregate CO₂emission changes; electricity consumption the second in importance. It reveals that the economy in Taiwan relied heavily on CO₂intensive industries, and that electricity consumption had become more important for economic growth. The relational order of fuels is electricity, coal, oil then gas, accordant with their CO₂emission coefficients in Taiwan. The positive relational grade of aggregate production implies that the aggregate industrial CO₂intensity tended to decline. The total energy consumption had a smaller and negative relational grade with CO₂emissions, and implies an improvement on aggregate energy intensity, while the CO₂emission coefficient increased. For industries with significant influence on CO₂emissions, the total energy consumption had the largest relational grades. It is important to reduce the energy intensity of these industries. Nevertheless, it is also critical to decouple energy consumption and production to reduce the impacts of CO₂mitigation on economic growth.     

A model for the CO2 capture potential

Global warming is a result of increasing anthropogenic CO₂ emissions, and the consequences will be dramatic climate changes if no action is taken. One of the main global challenges in the years to come is therefore to reduce the CO₂ emissions.Increasing energy efficiency and a transition to renewable energy as the major energy source can reduce CO₂ emissions, but such measures can only lead to significant emission reductions in the long-term. Carbon capture and storage (CCS) is a promising technological option for reducing CO₂ emissions on a shorter time scale.A model to calculate the CO₂ capture potential has been developed, and it is estimated that 25 billion tonnes CO₂ can be captured and stored within the EU by 2050. Globally, 236 billion tonnes CO₂ can be captured and stored by 2050. The calculations indicate that wide implementation of CCS can reduce CO₂ emissions by 54% in the EU and 33% globally in 2050 compared to emission levels today.Such a reduction in emissions is not sufficient to stabilize the climate. Therefore, the strategy to achieve the necessary CO₂ emissions reductions must be a combination of (1) increasing energy efficiency, (2) switching from fossil fuel to renewable energy sources, and (3) wide implementation of CCS.     

Renewable energy consumption and its environmental impacts: A meta-regression analysis

This study involves a meta-analytical review of several articles, using the closest assumptions for the independent variable (renewable energy consumption), to determine the relationship with its environmental impacts. Furthermore, Sustainable Development Goal (SDG) in 2015 pays attention to related problems in both developing and developed countries. The effects of carbon emissions, natural resources, renewable energy consumption, and non-renewable energy on the environment are also reviewed. Following the separation of studies, the closest assumption was observed for the independent variable (energy source applications) of renewable energy. The meta-analysis was obtained using OpenMEE and JASP, and the results show the observed outcome, which was expressed in percentage. Based on the analysis, the Renewable Energy model has a value of 0.15, with the largest forest plots of 0.73, 0.69, and 0.80, recorded for studies 13, 19, and 23, respectively, while the least forest plots were recorded for studies 6, 11, 12, 15, 20, 22, 24, 25, 26, and 28. Therefore, renewable energy consumption, specifically in the mining industry, has the capacity to influence global warming. The respective industry has a unique influence on the processes that require renewable energy, for instance, the coal mining industry produces a smaller forest plot value, compared to oil and gas, or other mineral industries.