CO2 emissions and financial development in an emerging economy: An augmented VAR approach

Abbasi, Faiza; Riaz, Khalid

doi:10.1016/j.enpol.2015.12.017

Cited by 564 publications

(263 citation statements)

References 33 publications

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“…One-way causation from positive shocks in bank-based financial development to positive shocks in CO 2 emissions is found; this empirical evidence contradicts that of Javid and Shahrif (2016) and Abbasi and Riaz (2016). We also find no causal relationship between positive (negative)…”

contrasting

confidence: 55%

“…This finding is consistent with that of Javid and Sharif (2016), who report that the allocation of domestic credit to the private sector impedes the preservation of environmental quality by increasing CO 2 emissions. In contrast, Abbasi and Riaz (2016) document that total credit, domestic credit to the private sector and stock market capitalization have negative and positive but insignificant effects on CO 2 emissions. The impact of positive and negative shocks in stock market-based financial development on CO 2 emissions is positive and negative, respectively, but the effects are statistically insignificant ( Table-6).…”

mentioning

confidence: 89%

“…Their empirical analysis further shows that financial development degrades environmental quality by increasing carbon dioxide emissions, and the analysis of causation indicates the presence of response effect of financial development on carbon dioxide emissions. In a recent study, Abbasi and Riaz (2016) re-estimate the association of financial development with carbon dioxide emissions by including foreign direct investment in the carbon dioxide emissions equation. They use total credit, domestic credit and market capitalization as an indicator of financial development 2 .…”

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confidence: 99%

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Financial development and environmental quality: The way forward

et al. 2016

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The present paper re-examines the asymmetric impact of financial development on environmental quality in Pakistan for the period 1985Q1 to 2014Q4. A comprehensive index of financial development is generated using Bank-and Stock market-based financial development indicators. The results show that inefficient use of energy adversely affects the environmental quality. This suggests adoption of energy efficient technology at both production and consumption levels. These technologies would be helpful to improve environmental quality, enhance the productivity in long-run and save energy. Bank-based financial development also impedes the environment. The government should encourage lenders to ease the funding for energy sector and allocate financial resources for environment friendly businesses rather than wasting them in consumer financing.

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confidence: 89%

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confidence: 99%

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Financial development and environmental quality: The way forward

et al. 2016

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“…However, since we have limited time and data available of other aspects, this study has considered only the CO 2 emissions per capita to be a proxy for environmental degradation. Moreover, carbon emission has been identified as a major pollutant (Edoja, Aye, & Abu, 2016) and accounts for about 75% of greenhouse gas emissions (Abbasi & Riaz, 2016). CO 2 emissions are one of the most applied emissions in Environmental Kuznets Curve (EKC) applications (Tutulmaz, 2015) which this study intends to test.…”

Section: Introductionmentioning

confidence: 99%

Effect of economic growth on CO₂ emission in developing countries: Evidence from a dynamic panel threshold model

Aye

2017

Cogent Economics & Finance

459

191

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This study investigated the effect of economic growth on CO 2 emission using the dynamic panel threshold framework. The analysis is based on data from a panel of 31 developing countries. The results indicate that economic growth has negative effect on CO 2 emission in the low growth regime but positive effect in the high growth regime with the marginal effect being higher in the high growth regime. Thus our finding provides no support for the Environmental Kuznets Curve (EKC) hypothesis; rather a U-shaped relationship is established. Energy consumption and population were also found to exert positive and significant effect on CO 2 emission. Including financial development indicator in the model did not change the conclusion about EKC hypothesis. Employing panel causality methods, there is evidence of significant causal relationship between CO 2 emission, economic growth, energy consumption and financial development. The findings emphasize the need for transformation of low carbon technologies aimed at reducing emissions and sustainable economic growth. This may include energy efficiency and switch away from nonrenewable energy to renewable energy.

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“…Salahuddin et al [14] investigated the relationship between carbon dioxide emissions, economic growth, electricity consumption and financial development in the Gulf Cooperation Council (GCC) countries using panel data for the period of 1980-2012, and they revealed that there is no causal link between financial development and carbon emissions. Abbasi and Riaz [15] explored the influence of economic and financial development on carbon emissions in a small emerging economy using the augmented VAR approach, and CO 2 emissions were found to cointegrate with financial development indicators.…”

Section: Introductionmentioning

confidence: 99%

Analysis of the Threshold Effect of Financial Development on China’s Carbon Intensity

et al. 2016

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Using panel data on 30 provinces in China from 2005 to 2012, this paper conducts an empirical test on the threshold effect of the relationship between financial development and carbon emission intensity from the perspectives of financial scale and financial efficiency. The results show that at a low level of per capita GDP, the expansion of the financial scale and the enhancement of financial efficiency will increase carbon intensity. When the per capita GDP is greater than the threshold value (RMB 37,410), the expansion of the financial scale will also increase carbon intensity, but the potency of this effect will be weaker. At the same time, the improvement of financial efficiency will help reduce carbon intensity. Most provinces with per capita GDP greater than the threshold value (RMB 37,410) are located in the eastern coastal areas of China, whereas most provinces with per capita GDP less than the threshold value are located in the central and western areas of China. Both raising the level of openness and improving the industrial structure will have significantly positive effects on carbon intensity.

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CO2 emissions and financial development in an emerging economy: An augmented VAR approach

Cited by 564 publications

References 33 publications

Financial development and environmental quality: The way forward

Financial development and environmental quality: The way forward

Effect of economic growth on CO₂ emission in developing countries: Evidence from a dynamic panel threshold model

Analysis of the Threshold Effect of Financial Development on China’s Carbon Intensity

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CO2 emissions and financial development in an emerging economy: An augmented VAR approach

Cited by 564 publications

References 33 publications

Financial development and environmental quality: The way forward

Financial development and environmental quality: The way forward

Effect of economic growth on CO2 emission in developing countries: Evidence from a dynamic panel threshold model

Analysis of the Threshold Effect of Financial Development on China’s Carbon Intensity

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Product

Resources

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Effect of economic growth on CO₂ emission in developing countries: Evidence from a dynamic panel threshold model