Role of fiscal policy in energy efficiency and CO₂ emission nexus: An investigation of belt and road region

Abstract

Belt and road initiative (BRI) contains the transport, construction, and energy-related projects to push the wheel of economic development of BRI's participant at the cost of ecological consequences. These sectors are highly energy-intensive and upsurge the CO 2 emission. Energy efficiency and renewable energy are considered two essential solutions to control CO 2 emissions. Energy efficiency is proficient in yielding energy and demand savings that can relocate the electricity generation from primary energy resources, that is why, nowadays, energy efficiency is considered as an energy resource worldwide. Fiscal policy is a vital policy tool regarding energy policies related to production, growth, distribution, and energy consumption. Therefore, this study investigates the relationship between energy efficiency and CO 2 emission in light of the fiscal policy index for BRI countries. The results infer that energy efficiency and fiscal policy deteriorate the CO 2 emission. On the other side, FDI and GDP will lead to an increase in CO 2 emission. This study provides useful insights for policymakers on how to take preventive and remedial measures to reduce CO 2 emissions in different sectors and demonstrated that technology in the energy sector could help to mitigate climate change through energy efficiency. Furthermore, future research can be carried out on how digitalization, energy efficiency monitoring processes, and management process can help to mitigate.

Striving towards sustainable development: how environmental degradation and energy efficiency interact with health expenditures in SAARC countries

“…As discussed in previous sections, energy is one of the most important factors in environmental degradation and the use of inefficient and non-renewable energy use is putting a considerable population at risk of different brain, heart, and respiratory diseases. Renewable energy production, consumption, and energy-efficient technologies in the energy sector can play an essential role in addressing climate change (Akbar et al 2021b), ultimately improving health indicators. Previous studies such as Weimin et al (2021), Chishti et al (2021) concluded that renewable energy consumption improves environmental quality by reducing CO 2 emissions and shown a negative association between energy efficiency and environmental pollution.…”

“…The atmospheric half-life of NOx is 3 to 5 h (Boon and Marletta 2006), SO 2 is 6 to 1 day (Brimblecombe1996), and almost 27 years of CO 2 . Also, CO 2 emissions are widely used by previous researchers (Akbar et al 2021a, b;Khan et al 2020a, b;Xinmin et al 2020) (Akbar et al 2021b;Hafeez et al 2018;Khan et al 2020a, b;Xinmin et al 2020). GDP per unit of energy use has been used for energy efficiency (Akbar et al 2021b;Malinauskaite et al 2019;Nasir et al 2021).…”

“…Also, CO 2 emissions are widely used by previous researchers (Akbar et al 2021a, b;Khan et al 2020a, b;Xinmin et al 2020) (Akbar et al 2021b;Hafeez et al 2018;Khan et al 2020a, b;Xinmin et al 2020). GDP per unit of energy use has been used for energy efficiency (Akbar et al 2021b;Malinauskaite et al 2019;Nasir et al 2021). Gross domestic product has been considered a variable for economic growth in GDP per capita growth annual percentage as many scholars like 2020), Khan et al (2021), andSun et al (2021).…”

“…In addition, the main reasons for CO 2 emissions are excessive energy use (Khan et al 2019;Xinmin et al 2020). Akbar et al (2021b), Hafeez et al (2019), andYuelan et al (2019) have shown that energy utilization has been increasing for many years as economic growth is expanding and found a significantly positive and bidirectional causal association between CO 2 emission and energy use. When local manufacturing businesses extend their operations to achieve economies of scale via mass production, they use more energy, leading to more health problems (Sethi et al 2020).…”

Heterogeneous Effects of the Belt and Road Initiative on Energy Efficiency in Participating Countries

“…Based on the panel data of 69 BRI countries from 2000 to 2014, Khan et al [42] found that technological innovations, economic growth, and foreign direct investment have a negative impact on renewable energy. Similarly, Akbar et al [43] found that energy efficiency can reduce CO 2 emission; however, FDI and GDP will lead to an increase in CO 2 emission. In addition, Akbar et al [44] also analyzed the transport energy efficiency by taking two years as a pre-and post-BRI case, showing that, after the BRI, there is an increase in economic activity but a decline in transport energy efficiency.…”