Analyzing asymmetric impact of economic growth, energy use, FDI inflows, and oil prices on CO2 emissions through NARDL approach

G20 countries are responsible for more than 80% of global energy consumption and the largest CO 2 emissions in the world. Literature related to the energy consumption-environmental quality-subjective wellbeing nexus is limited and lacks consensus. This paper analyses the impact of energy consumption and environmental quality on subjective wellbeing in G20 countries from 2006 to 2019 using a panel-corrected standard error (PCSE) model. Cantril life ladder data is used as a proxy of subjective wellbeing. For robustness, the Newey-West standard error model is used. The findings reveal that renewable energy consumption and environmental quality, i.e. lesser carbon emissions, enhance subjective wellbeing in G20 countries. In contrast, non-renewable energy consumption degrades subjective wellbeing. Moreover, the study also finds bidirectional causality between renewable energy consumption, non-renewable energy consumption, and economic growth. The policymakers of these countries should encourage renewable energy production and its consumption to reduce carbon emissions for conserving the environment and enhancing their people’s subjective wellbeing.

Section: Introductionmentioning

confidence: 99%

Do energy consumption and environmental quality enhance subjective wellbeing in G20 countries?

Kumari

Kumar

Sahu

2021

“…In summary, previous research relies heavily on symmetric methods to evaluate the symmetry (linear) effects of EPU and oil prices on carbon emissions, and the asymmetries in the influences of EPU and oil prices have not received much attention (Ahmed et al 2021;Mujtaba and Jena 2021). The results obtained have limited our understanding of the true influence of positive and negative changes in EPU and oil prices on emissions, and further research is needed to quantify their potential asymmetry in environmental effects.…”

Section: Introductionmentioning

confidence: 99%

“…First, we perform a time series analysis of the association between carbon emissions, EPU, and oil prices. To our knowledge, although some scholars have assessed the environmental effect of EPU and oil prices respectively (Adedoyin and Zakari 2020;Mujtaba and Jena 2021;Adedoyin et al 2021c), there are little to no studies that address the effects of EPU and oil prices on carbon emissions in the context of the determinants of emissions and apply them to the USA and China. Hence, the current study is warranted to clarify the previous findings.…”

Section: Introductionmentioning

confidence: 99%

The symmetric and asymmetric effects of economic policy uncertainty and oil prices on carbon emissions in the USA and China: evidence from the ARDL and non-linear ARDL approaches

Zhang

Huang

2021

The environmental consequences of economic policy uncertainty (EPU) and oil price changes have attracted much attention in recent years, but few studies have estimated the asymmetric impact. This research investigates the symmetric and asymmetric effects of EPU and oil prices on carbon emissions in the USA and China. Based on monthly data from 1995:1 to 2019:12, we address this issue by applying the ARDL and non-linear ARDL cointegration methodology. The symmetric results show that the change in EPU has no evident impact on carbon emissions in the short and long run for the USA and China, and oil prices have a lag effect in this regard. The non-linear ARDL estimation documents significant asymmetric effects of EPU and oil prices. Specifically, the negative change in EPU facilitates emissions in the USA in the long and short run, and a unit increase in EPU increases emissions by 2.24% and 4.95%, respectively, whereas its positive change does not produce any significant effect. Carbon emissions in China are significantly and positively affected by the positive change in EPU only over the long run, and an increase in EPU increases emissions by 0.04%. Furthermore, the positive shock of oil prices significantly and positively influences emissions in the long run, and a unit increase in this factor increases emissions by 15.73% and 0.44% in the USA and China, respectively. Moreover, the short-term effect of the negative shock of oil prices exhibits a lag effect. The empirical results provide a practical reference for the USA and China to craft robust policies on emission cutting.

“…PHH is also supported by research (Phuc Nguyen et al, 2020;Muhammad et al, 2021). Mujtaba and Jena (2021) analyses the asymmetric effects of FDI on CO2 emissions in India. Their study support the PHH hypothesis.…”

Section: Linkage Between Fdi and Co2 Emissionsmentioning

confidence: 96%

Key drivers of consumption-based carbon emissions: empirical evidence from SAARC countries

Shekhawat

Yadav

Sanu³

et al. 2021

To devise an appropriate climate policy dealing with environmental degradation, reliable measurement of CO2 emissions is essential. In the recent past, most researchers have utilized production-based emissions in their studies, ignoring the important role of consumption-based emissions in environmental degradation. Therefore, the present research examines the drivers of consumption-based CO2 emissions in SAARC nations over the period 1990 to 2018. By employing traditional and second-generation panel cointegration methodologies, the study, more specifically, explores the link between consumption-based CO2 emissions and its four macroeconomic determinates, namely, GDP growth, energy consumption, FDI, and trade openness (measured by Composite Trade Share Index). The study also applies the FMLOS and DOLS techniques for calculating the long-run elasticities of regressors with respect to the explained variable. The results establish a cointegration relationship between the variables and validate the "EKC hypothesis" for the SAARC region. It is also found that in the long run, as expected, energy consumption enhances the consumption-based CO2 emissions while FDI and trade openness improve the environmental quality by plummeting emissions. Most importantly, the study rejects the "pollutionhaven hypothesis" for the SAARC region based on the negative and statistically significant coefficient of FDI.Lastly, based on the results, some policies are recommended for the abatement of environmental degradation in SAARC countries. As the SAARC nations rely heavily on fossil-based energy, it is suggestive for these economies to enhance the level of energy efficiency and augment the share of renewable energy sources in the energy-mix. Furthermore, the policy-designers in this region should encourage trade openness and liberalize inward FDI for containing consumption-based emissions.