Financial development, globalization, and CO2 emission in the presence of EKC: evidence from BRICS countries

Abstract

This study examines the impact of energy consumption, financial development, globalization, economic growth, and urbanization on carbon dioxide emissions in the presence of Environmental Kuznets Curve (EKC) model for BRICS economies, by using a family of econometric techniques robust to heterogeneity and cross-sectional dependence. Results from LM test, CIPS and CADF unit root test, Westerlund Cointegration test, the Dynamic seemingly unrelated regression (DSUR), and Dumitrescu-Hurlin Granger causality test show that (i) the data is cross sectionally dependent and heterogeneous; (ii) carbon dioxide emissions, energy consumption, financial development, globalization, economic growth, square of GDP and urbanization have integration of order one; (iii) the examined variables are co-integrated; (iv) energy consumption and financial development contribute to the carbon dioxide emissions whereas globalization and urbanization have negative but insignificant relationship with carbon dioxide emissions; (v) supports the EKC hypothesis in BRICS economies; (vi) bidirectional causality exists among energy consumption, financial development, economic growth and square of GDP with carbon dioxide emissions whereas globalization and urbanization have unidirectional relationship with carbon dioxide emissions. Since these panel techniques account for heterogeneity and cross-sectional dependence in their estimation procedure, the empirical results are robust and reliable for policy recommendations. Furthermore, this study also uses time series tests (ADF, P-P, and FMOLS) to find the empirical results for each of the country and finds mixed results. Empirical findings directed towards some important policy implications.

Impact of corruption in public sector on environmental quality: Implications for sustainability in BRICS and next 11 countries

“…(5) are recorded in Table 5. (2017), Haseeb et al (2018). For both of the cases, the first turnaround points are within the sample range, which signifies that both the groups have achieved EKC at a very early stage of economic growth, and then they departed from that state owing to the nature of economic growth.…”

The Underground Economy and Carbon Dioxide (CO2) Emissions in China

“…Therefore, if there exist pollution and energy-intensive industries among the underground economy, then, the underground economy can lead to nontrivial environmental issues (e.g., the increase of at both the regional and national level and validate the EKC assumption in China. Haseeb et al [28] estimated the impact of economic growth, financial development and other socio-economic factors on CO 2 emissions in the presence of the EKC framework for BRICS economies, new evidence was found to support the EKC hypothesis in BRICS economies.…”

Asymmetric Dynamics of Oil Price and Environmental Degradation: Evidence from Pakistan

“…The links between the energy use/consumption and environmental degradation have been explored by Huang et al (2008), Pao and Tsai (2010), Saboari and Sulaiman (2013) Lee and Chang (2007) and Presno et al (2017). Haseeb et al (2017) explored the association between energy consumption, population and pollution in BRICS countries and found a positive relationship of energy consumption and population with the level of pollution. Pao and Tsai (2010) observed the impact of energy usage and GDP on environmental degradation in BRICS economies and observed that energy usage and GDP caused environmental degradation.…”