Energy consumption, economic policy uncertainty and carbon emissions; causality evidence from resource rich economies

Adams, Samuel; Adedoyin, Festus Fatai; Olaniran, Eniola; Bekun, Festus Vıctor

doi:10.1016/j.eap.2020.09.012

Cited by 218 publications

(160 citation statements)

References 58 publications

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“…For countries in our samples, the economic contraction caused by high EPU overwhelms the neglected implementation of environmental regulation, reduced commitments on environmental protection of enterprises, as well as the higher use of cheaper but more polluted energy sources. While this outcome con rms the signi cantly environmental impact of EPU, it is different from empirical literature that indicate a positive long-run relationship between two variables (Adams et al, 2020;Adedoyin et al, 2021;Anser et al, 2021;Danish et al, 2020;Sohail et al, 2021;Yu et al, 2021). 2) and (3).…”

Section: Model Speci Cation and Estimation Methodscontrasting

confidence: 93%

“…They nd that the disruption of economic activities due to uncertainty in economic policy causes signi cant increase in carbon dioxide emissions. Similarly, Adams et al (2020) conclude a signi cant association between EPU and carbon dioxide emissions in the long-run.…”

Section: Brief Literature Reviewmentioning

confidence: 77%

“…For empirical analysis, the authors follow the speci cation model developed by (Adams et al, 2020;Adedoyin et al, 2021;Chu, 2021) where they consider GDP per capita, energy intensity, renewable energy, EPU, and ECI as key determinants of environmental quality. The econometrical model is expressed as follows:…”

Section: Model Speci Cation and Estimation Methodsmentioning

confidence: 99%

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Environmental quality and the role of economic policy uncertainty, economic complexity, renewable energy, energy intensity: the case of G7 countries

Chu

2021

Preprint

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This study explores the environmental impacts of economic policy uncertainty, economic complexity, renewable energy, and energy intensity for G7 countries. To this end, the study employs Fully Modified Ordinary Least Squares and fixed effect model with Driscoll and Kraay (1998) robust standard errors for a panel dataset from 1997 to 2015. The findings demonstrate a long-term relationship between interested variables and carbon dioxide emissions and ecological footprint. Specifically, high energy intensity propels environmental pollution while economic policy uncertainty and renewable energy prove effective in controlling environmental degradation. The environmental Kuznet curve of economic complexity and environmental quality holds for G7 countries. Moreover, economic policy uncertainty strongly moderates the environmental effect of renewable energy, economic complexity, and energy intensity. While economic policy uncertainty amplifies the beneficial environmental effects of renewable energy and economic complexity, it magnifies the harmful effect of energy intensity on environmental quality. These empirical outcomes allow us to draw useful implications for policymakers to mitigate the environmental degradation.

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Section: Model Speci Cation and Estimation Methodscontrasting

confidence: 93%

Section: Brief Literature Reviewmentioning

confidence: 77%

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Environmental quality and the role of economic policy uncertainty, economic complexity, renewable energy, energy intensity: the case of G7 countries

Chu

2021

Preprint

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“…eir results revealed two-way causality relationship between ITAs and EPU in France, Ireland, and United States and one-way causality relationship from ITAs to EPU in Brazil, Canada, China, and Germany, while between ITAs and EPU in Chile, Japan, South Korea, Russia, and Sweden, there were no causality relationships. To establish the nexus between EPU and carbon dioxide (CO 2 ) emissions, Adams et al [52] used the World Uncertainty Index to analyse the long-run relationship of EPU, energy consumption, and CO 2 emissions for countries including Brazil, China, India, Israel, Russia, Saudi Arabia, South Africa, Turkey, Ukraine, and Venezuela over the period 1996 to 2017. eir results based on the panel pooled mean group-autoregressive distributed lag model showed a significant association between EPU and CO 2 emissions in the long run. e causality analysis conducted also revealed bidirectional relationship between EPU and CO 2 emissions.…”

Section: Literature Reviewmentioning

confidence: 99%

Economic Policy Uncertainty Linkages among Asian Countries: Evidence from Threshold Cointegration Approach

Osei

Djimatey

Adam

2021

Discrete Dynamics in Nature and Society

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This paper employs the threshold cointegration methodology to assess the long- and short-run dynamics of asymmetric adjustment between economic policy uncertainty (EPU) of China-India, China-Japan, China-Korea, India-Japan, India-Korea, and Japan-Korea pairs using monthly EPU data ranging from January 1997 to April 2020. The relationship between the EPU pairs is examined in terms of Engle-Granger and threshold cointegrations. The findings provide evidence of long-run threshold cointegration and that the adjustments towards the long-run equilibrium position are asymmetric in the short run for the China-India and India-Japan EPU pairs in M-TAR specification with nonzero threshold values. Also, the results suggest a unidirectional causal relationship between China-India, China-Japan, and India-Korea EPU pairs in the long and short run using the spectral frequency domain causality approach. However, a bidirectional causal relationship between China-Korea, India-Japan, and Japan-Korea pairs exists in the long and short run. Therefore, the findings provide some clues to economic policymakers within the Asian subregion for possible policy uncertainty synergies and spillovers among the Asian countries.

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“…The results indicate that EPU plays a critical role in the effort of mitigating CO2 emissions. Additionally, Adams et al (2020) using data from economies characterized by resource-rich but crisis-prone demonstrate that there is a significant association between geopolitical risk, EPU, energy consumption, economic growth and CO2 emissions in the long-run. This implies that higher levels of EPU adversely affect carbon abatement.…”

Section: Introductionmentioning

confidence: 99%

How Does Economic Policy Uncertainty Affect CO2 Emissions? A Regional Analysis in China

Liu

Zhang

2021

Preprint

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More recently, the COVID-19 pandemic outbreak has created massive economic policy uncertainty (EPU). EPU and its economic fallout have been a hot topic of study, however, the impact of EPU on CO2 emissions has been seldom addressed to date. This paper investigates the direct impact of the EPU on CO2 emissions and indirect effect via the environmental regulation at the national and regional levels using the panel data model and provincial panel data from 2003 to 2017 in China. The empirical results show that the central region is the most special one, which all explanatory variables except energy consumption are all non-significant even at the 10% level. For other samples, there is a significant positive correlation between EPU and CO2 emissions, whether in the national or regional level. Additionally, environmental regulation alone can achieve the purpose of curtailing carbon emissions. However, when the EPU is taken into consideration, environmental regulation exerts a significantly positive effect on CO2 emissions, leading to unintended increase in emissions. Moreover, the Environmental Kuznets Curve (EKC) hypothesis was confirmed in the national and eastern samples, while CO2 emissions increase monotonically as economic level grows for western datasets. Based on the overall findings, some policy implications were put forward.

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Energy consumption, economic policy uncertainty and carbon emissions; causality evidence from resource rich economies

Cited by 218 publications

References 58 publications

Environmental quality and the role of economic policy uncertainty, economic complexity, renewable energy, energy intensity: the case of G7 countries

Environmental quality and the role of economic policy uncertainty, economic complexity, renewable energy, energy intensity: the case of G7 countries

Economic Policy Uncertainty Linkages among Asian Countries: Evidence from Threshold Cointegration Approach

How Does Economic Policy Uncertainty Affect CO2 Emissions? A Regional Analysis in China

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