The Role of Trade Liberalization in Carbon Dioxide Emission: Evidence From Heterogeneous Panel Estimations

Abstract

In the present globalized world, production forms are progressively divided across nations. Consequently, domestic consumption in one nation is progressively fulfilled by worldwide supply chains. This spectacle has pulled policy and widespread intellectual discussions on the assignment of greenhouse gas (GHG) emanations, especially carbon dioxide (CO2) emission; these are accountabilities connected to global trade since worldwide trade causes net carbon dioxide emission. The aim of the present study is to examine the impact of trade liberalization on carbon dioxide emission. We used the panel data of 105 developed and developing countries from 1990 to 2017. The results of FMOLS and DOLS confirm that all variables are connected in the long-run period. The results of long run coefficient confirm that that the trade liberalization has a positive effect on environmental degradation and cause to increase environmental degradation. Likewise, economic growth and energy consumption has also a positive and significant impact on environmental degradation. However, we find an evidence of negative and significant impact of renewable energy utilization on environmental degradation. Finally, the results of heterogeneous panel causality confirm that there is a uni-directional causal relationship between trade liberalization and environmental degradation where causality is running from trade liberalization to environmental degradation. However, we find a bi-directional causal relationship of environmental degradation with energy utilization and renewable energy utilization in all selected developed and developing countries.

The Impact of Investment, Economic Growth, Renewable Energy, Urbanisation, and Tourism on Carbon Emissions: Global Evidence

“…In accordance with Zandi et al (2019), both economic development and trade liberalisation have negative and statistically significant impacts on CO 2 emissions. Energy consumption, population increase, and economic expansion are correlated with CO 2 emissions positively, according to a significant body of current research (Tiwari et al, 2013).…”

The Relationship between Trade Liberalization, Financial Development and Carbon Dioxide Emission—An Empirical Analysis

“…Some researchers believe that trade liberalization reduces carbon dioxide emissions, and others hold the opposite view [22], based on the analytical framework of Grossman and Krueger [23], Chang and Chang [24] used four alternative measures to find that the relationship between trade liberalization and environmental quality also depends on country corruption. Oh and Bhuyan [25] studied the relationship between economic growth, energy consumption, trade liberalization and carbon dioxide emissions, they found that energy consumption has a positive effect on CO 2 emissions, but other variables have a positive effect only in the long run.…”

The Linkage Among Sea Transport, Trade Liberalization and Industrial Development in the Context of CO2: An Empirical Investigation From China

“…They recommend that the government of Bangladesh support the appropriate policy to use alternative energy facilities that would not emit much CO 2 emission. Zandi et al (2019) investigate the effect of trade openness on CO 2 emissions. They implemented the panel data analysis for 105 developed and developing countries from the period of 1990-2017.…”