Do agriculture-based economies mitigate CO₂emissions?

Abstract

Purpose This study aims to fill the gap in income-environment literature by adding agricultural contribution to the nexus. The authors investigate the short-run and long-run impact of agricultural contribution, renewable energy consumption, real income, trade liberalisation and urbanisation on carbon emissions for a balanced panel of five South Asian Association for Regional Cooperation (SAARC) countries spanning the period 1990-2013. Design/methodology/approach Pedroni and Kao cointegration techniques have been used to test the existence of long-run relationship between the variables. The directions of causal relationships have been verified using Granger causality tests. Further, the long-run parameters of the baseline equation have been estimated by using the fully modified ordinary least squares, the technique developed by Pedroni, (2001a) for heterogeneous cointegrated panels. Findings The result reveals that agricultural contribution and renewable energy consumption improve environmental quality in the long run, while urbanisation and per capita real income degrade it. The study did not find any evidence of “pollution heaven hypothesis” in the selected countries. The Granger causality tests confirm bidirectional causality between carbon emissions and income and between carbon emissions and urbanisation. In addition, there is unidirectional causality running from agricultural contribution to renewable energy consumption. Originality/value This is the only study to investigate the role of agriculture sector in carbon mitigation from a panel of South Asian economies. To the best of the authors’ knowledge, it is also the first study to test the applicability of “pollution heaven hypothesis” for SAARC countries.

The long-run effects of energy use, urbanization and financial development on carbon dioxide emissions

“…In an attempt to address the problem of CO 2 emissions which is mainly from human-induced activities, researchers have developed a keen interest in identifying the effects of various economic and non-economic variables on carbon emissions. The key variables that have gained attention in the literature are income, trade, energy usage, urbanization and financial development (Adom et al , 2018; Kwakwa and Adu, 2016; Kwakwa et al , 2018; Farhani and Ozturk, 2015; Mahmood et al , 2019; Dar and Asif 2017a; Dar and Asif 2017b; Dar and Asif, 2019). The directions of the effect of these variables have been argued in many ways which are very often contradictory.…”

“…The justification for this study is on the premise that initial studies that explored the effect of energy on carbon emissions focused largely on (primary/total) energy usage (Chebbi and Boujelbene, 2008; Kwakwa and Adu, 2016; Sun, 2012; Zhou et al , 2018). In recent times, however, some researchers have devoted attention to explore the effect of other energy indicators such as energy intensity/efficiency, renewable energy and nonrenewable energy usage (Kwakwa and Alhassan, 2018; Belaïd and Zrelli, 2016; Dogan and seker, 2016; Dar and Asif, 2019). These studies have been selective by choosing particular energy types for the studies.…”

“…Further, Belaïd and Zrelli (2016) restricted their study to nonrenewable electricity consumption and renewable electricity consumption for Mediterranean countries. Besides, Twumasi (2017) examined the effect of renewable energy production for the USA; Asumadu-Sarkodie and Owusu (2017) tested the effect of electricity production from renewable and nonrenewable source for Ghana; and Dar and Asif (2019) focused on the effect of renewable energy on carbon emission in South Asian Association for Regional Cooperation countries. In this case, a study that will focus on one country/region to examine the effect of various forms of energy on carbon emissions is pertinent.…”

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

“…The study implemented panel ARDL and FMOLS and validated the PHH and EKC hypotheses in the short run and the absence of PHH in the long run. Dar and Asif (2019) investigated the impact of renewable energy consumption, trade liberalisation, real income, agricultural contribution, and urbanisation on carbon emissions in five SAARC countries from 1990 to 2013. The study used Pedroni and Kao cointegration techniques as well as Granger causality tests and found no evidence of PHH.…”

Agriculture Production, Pollution Emissions and Economic Growth from Southeast Asian Perspective

“…However, the study among European Union was conducted by Zafeiriou et al (2018) using NARDL cointegration test relationship between per capita income and agricultural emissions was positive. The study by Dar & Asif (2019) agricultural contribution were led to increasing environmental quality in the long term. The analysis was using Granger causality tests and results to confirm bidirectional causality between income and carbon emissions among South Asian Association for Regional Cooperation.…”