Financial Instability and Consumption-based Carbon Emission in E-7 Countries: The Role of Trade and Economic Growth

Safi, Adnan; Chen, Yingying; Wahab, Salman; Ali, Shahid; Yi, Xianrong; Imran, Muhammad

doi:10.1016/j.spc.2020.10.034

Cited by 192 publications

(87 citation statements)

References 52 publications

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“…ese eco-innovative methods switched the industrial structure from less efficient energy production to high-energy efficient production and, hence, have strong positive impact on environmental sustainability [15]. Financial development enables firms and government to invest more in eco-innovative and energy efficient methods, which improve environmental sustainability [16].…”

Section: Introductionmentioning

confidence: 99%

Financial Development and Carbon Emissions: Analyzing the Role of Financial Risk, Renewable Energy Electricity, and Human Capital for China

Guo

2021

Discrete Dynamics in Nature and Society

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This study introduces the role of financial risk index and renewable energy electricity output along with financial development and human capital as new determinants of carbon emissions and uses updated time-series data from 1988–2018 for China, employing novel econometric approaches, i.e., Narayan and Popp unit root test with structural breaks, Maki cointegration, and frequency domain causality test for long, short, and medium run causality. The empirical outcome shows that improvement in human capital index and rising shares of renewable energy in electricity output help to limit carbon emissions. In contrast, gross domestic product, financial risk index, and structural break of 2001 increase carbon emissions. Moreover, structural break year of 2008 and financial development index reduces carbon emissions. The negative association between financial development and carbon emissions supports the positive school of thoughts of financial development which promotes sustainable environment. This study recommends promotion of quality human capital and green financial development along with increasing the shares of renewable energy in electricity for achieving China 2030 climate targets of reducing pollution.

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Section: Introductionmentioning

confidence: 99%

Financial Development and Carbon Emissions: Analyzing the Role of Financial Risk, Renewable Energy Electricity, and Human Capital for China

Guo

2021

Discrete Dynamics in Nature and Society

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“…Instead, they used CO 2 emissions and ecological footprint, etc., as proxies of environmental degradation. The uniqueness of using CCO 2 carbon emissions is that it takes into account the global supply chain that contributes to the creation of emissions and distinguishes between emissions created in one nation and used in another (Safi et al 2020 ; Khan et al 2020a , b , c ; Knight and Schor, 2014 ; Shahbaz et al 2020 ).…”

Section: Methodsmentioning

confidence: 99%

Determinants of consumption-based carbon emissions in Chile: an application of non-linear ARDL

Adebayo

Udemba

Ahmed

et al. 2021

Environ Sci Pollut Res

130

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In recent years, a growing number of scholars have employed various proxies of environmental degradation to understand the reasons behind rising environmental degradation. However, very few studies have considered consumption-based carbon emissions, even though a clear understanding of the impact of consumption patterns is essential for redirecting the pattern to more sustainable consumption. Thus, this study takes a step forward by using consumption-based carbon emissions (CCO 2 ) as a proxy of environmental degradation using the novel non-linear ARDL technique for Chilefrom 1990 to 2018. To the best understanding of the investigators, no prior studies have investigated the drivers of consumption-based carbon emissions utilizing non-linear ARDL. The study employed ADF and KSS (non-linear) tests to check the data series’ stationary level. Additionally, the symmetric and asymmetric ARDL approaches are utilized to explore cointegration and long-run linkages. According to the results, there is no symmetric cointegration among the variables; however, the empirical estimates reveal a long-run asymmetric connection between the indicators and CCO 2 emissions. The novel results from the asymmetric ARDL indicate that negative and positive changes in economic growth deteriorate the quality of the environment. Interestingly, a reduction in economic growth makes a more dominant contribution to environmental degradation. Moreover, positive changes in renewable energy usage improve the quality of Chile’s environment, inferring that the country can achieve a reduction in environmental degradation by boosting renewable energy consumption. Surprisingly, the study found that technological innovation is ineffective in reducing consumption-based carbon emissions, which implies that Chile’s technological innovation is not directed towards manufacturing green technology. Finally, the policy implications are discussed with respect to reducing consumption-based carbon emissions.

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“…A study by Safi et al ( 2021 ) examined the impact of financial instability on consumption-based carbon emissions in E-7 economies (Seven Emerging Economies) from 1995 to 2018 by employing Panel Cointegration and Cross-sectional Augmented ARDL (CS-ARDL) methodologies. The results confirmed both the short- and long-run relationship among the observed variables: consumption-based carbon emissions, financial instability, imports, exports, technological innovation, and economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

International trade and consumption-based carbon emissions: evaluating the role of composite risk for RCEP economies

Hassan

Song

Kırıkkaleli

2021

Environ Sci Pollut Res

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To tackle the issue of climate change and environmental degradation debates regarding carbon neutrality is on the rise. Regional Comprehensive Economic Cooperation (RCEP), the leading trading union, covers nearly third of global economy, world population, is responsible for thirty percent of global trade and global gross domestic product. The existent study tests the impact of financial, economic, political, and composite risk on consumption-based carbon dioxide emissions (CCO 2 ) in selected RCEP economies during the period of 1990 to 2020. The empirical analysis consists of cross-sectional dependence, slope heterogeneity, cross-sectional augmented panel unit root test, Westerlund cointegration, second-generation cross-section augmented autoregressive distributed lags model (CS-ARDL), and panel causality test. Further, we explore the role of imports, renewable energy supply, exports, and gross domestic product per-capita on CCO 2 . The empirical results suggest that the less political risk help to mitigate while the lower financial, economic, and composite risk increase CCO 2 emissions in selected RCEP economies. Moreover, exports and renewable energy supply show mitigating effect, whereas imports show upsurge in CCO 2 . Additionally, a bidirectional causality exists between exports and CCO 2 , imports and CCO 2 , GDP per-capita and CCO 2 , political risk and CCO 2 , and renewable energy and CCO 2 emissions, while a one-way causality from financial risk, composite risk, and economic risk to CCO 2 . Renewable energy supplies along with the improvement in sub-components of political risk, for instance, corruption, government stability, would help to effectively tackle the issue of CCO 2 emissions.

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Financial Instability and Consumption-based Carbon Emission in E-7 Countries: The Role of Trade and Economic Growth

Cited by 192 publications

References 52 publications

Financial Development and Carbon Emissions: Analyzing the Role of Financial Risk, Renewable Energy Electricity, and Human Capital for China

Financial Development and Carbon Emissions: Analyzing the Role of Financial Risk, Renewable Energy Electricity, and Human Capital for China

Determinants of consumption-based carbon emissions in Chile: an application of non-linear ARDL

International trade and consumption-based carbon emissions: evaluating the role of composite risk for RCEP economies

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