Linking international trade and foreign direct investment to CO2 emissions: Any differences between developed and developing countries?

Essandoh, Obed Kwame; Islam, Moinul; Kakinaka, Makoto

doi:10.1016/j.scitotenv.2019.136437

Cited by 324 publications

(124 citation statements)

References 45 publications

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“…The heterogeneous effects of trade openness on carbon emission suggest that trade openness improves the environment of rich countries, but aggravates the environmental pollution of poor countries. This is in line with the recognized phenomenon of carbon transfer in the process of international trade ( Essandoh et al., 2020 ). Environmental standards in LI countries are generally lower than in other countries with higher income levels, and the environmental management system is deficient.…”

Section: Resultssupporting

confidence: 87%

The effects of trade openness on decoupling carbon emissions from economic growth – Evidence from 182 countries

Wang

Zhang

2021

Journal of Cleaner Production

483

140

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The current rise of protectionism has become the main uncertainty associated with global energy, economy, and the environment. Furthermore, the decoupling carbon emissions from economic growth is crucial for implementing Intended Nationally Determined Contributions (INDCs). These INDCs would be discounted if decreasing carbon emissions would require sacrificing economic growth. This study explored the effect of protectionism (by measuring trade openness based on available data) on the decoupling carbon emissions from economic growth. For this, the heterogenous effects of trade openness on carbon emissions were investigated using in data of 182 countries from 1990 to 2015. The results show that trade openness decreased carbon emissions in high-income and upper-middle-income countries, while having no significant impact on carbon emissions of lower-middle-income countries; even worse, for low-income countries, trade openness increased carbon emissions. The heterogeneous effects of trade openness on carbon emissions indicate that trade openness positively impacts the decoupling economic growth from carbon emission in rich countries, but negatively impacts poor countries. In addition, increasing individual incomes and population distort the decoupling economic growth from carbon emissions. Renewable energy and high oil prices contributed to the decoupling economic growth from carbon emissions. These effects are similar in all countries. Targeted policy implications are presented that enable the decoupling economic growth from carbon emissions for countries with different income levels.

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Section: Resultssupporting

confidence: 87%

The effects of trade openness on decoupling carbon emissions from economic growth – Evidence from 182 countries

Wang

Zhang

2021

Journal of Cleaner Production

483

140

View full text Add to dashboard Cite

show abstract

“…In addition to its high correlation and Granger causality with FDI, trade openness also has an effect on pollution. Essandoh et al. (2020) find that trade openness is environmentally favourable for developed countries, with no evidence of impact in developing countries.…”

Section: Literature Reviewmentioning

confidence: 83%

“…GFCF could be related to capital intensive industries, as increasing the capital invested in a production process generally results in higher energy consumption that may, in turn, increase pollution ( Sapkota and Bastola, 2017 ). Trade as a share of GDP (TO) represents trade openness, as is usual in the literature (e.g., Essandoh et al., 2020 ; Sbia et al., 2014 ), and has a higher correlation with FDI, and also Granger Causality, meaning that trade is, most probably, related to FDI. Environmentally-related tax revenue (REG) is used as a proxy for environmental regulation ( Hashmi and Alam, 2019 ).…”

Section: Methodsmentioning

confidence: 99%

“…The relationship between FDI and the environment was initially analysed by academics through the impact of international trade on the environment, and subsequently, by considering the effect of FDI on the environmental quality of host countries ( Shahbaz et al., 2015 ). International trade (reflected in trade openness) is still of great value and its effects are commonly evaluated in this field (e.g., Essandoh et al., 2020 ; Sbia et al., 2014 ). In addition to its high correlation and Granger causality with FDI, trade openness also has an effect on pollution.…”

Section: Literature Reviewmentioning

confidence: 99%

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The impact of foreign direct investment on emission reduction targets: Evidence from high- and middle-income countries

Marques

Caetano

2020

Structural Change and Economic Dynamics

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“…Furthermore, FDI also contributes to economic growth at the cost of environmental degradation. To investigate this hypothesis, Essandoh et al (2020) employ PMG-ARDL approach. The results from PMG-ARDL report that FDI increases carbon emissions in developed countries.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of Monetary Policy Uncertainty and Fiscal Policy Uncertainty on CO2 Emissions in the Us

Anser

Syed

Khalid

et al. 2020

Preprint

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Nowadays, environmental degradation is perceived as one of the serious concerns across the globe. One of the prime reasons behind environmental degradation is CO2 emissions. Therefore, researchers are actively putting their efforts to explore the determinants of CO2 emissions to mitigate CO2 emissions. On this basis, the present study contributes to the existing literature by investigating the impact of monetary policy uncertainty (MPU) and fiscal policy uncertainty (FPU) on CO2 emissions (environmental degradation). The current study employs ARDL methodology and uses annual data ranging from 1985 to 2019 for US. The results from the ARDL model report that there is an existence of long-run relationship among the variables. Moreover, MPU escalates the carbon emissions in both short-run and long-run. This implies that increase in MPU is responsible for rise in environmental degradation. On the contrary, FPU plunges the carbon emissions in both short- and long-run. This indicates that increase in FPU decreases the environmental degradation. Findings from the current study propose that policy makers should introduce reforms and launch policies to shrink MPU. Next, this study proposes that rule should be adopted as monetary policy making framework in lieu of discretion. Furthermore, the current study recommends that FPU should not be utilized as a tool to mitigate environmental degradation, because FPU has severe economic impacts.

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Linking international trade and foreign direct investment to CO2 emissions: Any differences between developed and developing countries?

Cited by 324 publications

References 45 publications

The effects of trade openness on decoupling carbon emissions from economic growth – Evidence from 182 countries

The effects of trade openness on decoupling carbon emissions from economic growth – Evidence from 182 countries

The impact of foreign direct investment on emission reduction targets: Evidence from high- and middle-income countries

Impact of Monetary Policy Uncertainty and Fiscal Policy Uncertainty on CO2 Emissions in the Us

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Linking international trade and foreign direct investment to CO2 emissions: Any differences between developed and developing countries?

Cited by 324 publications

References 45 publications

The effects of trade openness on decoupling carbon emissions from economic growth – Evidence from 182 countries

The effects of trade openness on decoupling carbon emissions from economic growth – Evidence from 182 countries

The impact of foreign direct investment on emission reduction targets: Evidence from high- and middle-income countries

Impact of Monetary Policy Uncertainty and Fiscal Policy Uncertainty on CO2&nbsp;Emissions in the Us

Contact Info

Product

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Impact of Monetary Policy Uncertainty and Fiscal Policy Uncertainty on CO2 Emissions in the Us