Evaluating the Energy Consumption Inequalities in the One Belt and One Road Region: Implications for the Environment

Abstract

Additional energy demand is needed to accomplish the mega-projects of the Belt & Road Initiative (BRI). As energy consumption is one of the prime determinants of environmental degradation, the present study investigates the impact of energy inequalities on environmental degradation along with financial development. The entropy approach is applied to quantify the three energy consumption inequalities; average, between, and total energy consumption inequality respectively. The energy consumption inequality of BRI economies follows an uprising temporal trend. The estimates reveal that East Asia and South Asia have the highest and lowest energy consumption inequality among the BRI regions. Within regions, it is found that Central Asia has the lowest, and East Asia has the highest energy inequality among the BRI regions, respectively. Based on bootstrapping, the generalized least square (GLS) is applied to quantify the impact of energy consumption inequalities on environmental degradation along financial development. The energy inequalities have a statistically positive impact on environmental degradation in BRI regions, East Asia, Central Asia, the Middle East and North African region (MENA), and Southeast Asia respectively. In contrast, South Asian economies are sustaining environmental quality despite the energy consumption inequalities. Financial development also has a significantly major impact on environmental degradation in BRI, and its regions except for Central Asia, and MENA.

Towards Achieving Sustainable Development: Role of Technology Innovation, Technology Adoption and CO2 Emission for BRICS

“…Therefore, the total energy consumption upsurges the CO 2 emission and carbon footprints [ 37 ]. Likewise, the energy disparities are also upsurging the CO 2 emission in the One Belt and Road region (BRI) [ 50 ]. Likewise, technology innovation models and technology adoption models also provide evidence of the U-Shape EKC hypothesis in the BRICS region, in line with the work of [ 19 , 20 ].…”

“…The U-Shape EKC hypothesis indicates that GDP reduces the CO 2 emission at initial stages; the CO 2 emissions start to increase in later stages of development, which is a line with the study of [ 34 ]. Hafeez et al [ 50 ] briefly examined the energy use, trade openness, and higher income levels in China, concluding that environmental deterioration has been critical in China due to fast growth in the last few decades. Lastly, the coefficient of trade openness is 0.661, implying that a 1% increase in trade openness will enrich the BRICS CO 2 emission by 0.66%.…”

“…Value-added trade upsurges the air pollution indicators [ 40 ]. The study of Hafeez et al [ 50 ] has studied the energy–growth nexus and found that energy consumption, economic growth, and trade openness reduce pressure on energy demand after the threshold income level for the BRICS countries. On the contrary, Yao et al [ 36 ] point out that free trade agreements are a better strategy to reduce bilateral CO 2 emissions.…”

Energy Consumption and Trade Openness Nexus in Egypt: Asymmetry Analysis

“…They report that the decreasing financial development increases the CO 2 emissions but the decreasing energy consumption helps in reducing CO 2 emissions. Hafeez et al [14] explore the energy consumption inequality issue in the Belt and Road Initiative (BRI). They find that energy consumption inequality is found the highest for the East Asia and the lowest for South and Central Asia.…”

Inequalities by energy sources: An assessment of environmental quality

“…On the other side, trade can open doors to access advanced energy resources. Given the importance of energy consumption inequalities the empirical model is composed following Gozgor; Hasson and Masih; Pascual Sáez et al; Hafeez et al [22,23,39,40] as:…”