Taking Venezuela back to the sustainability path: The role of financial development and economic integration in low‐carbon transition

Abstract

Environmental protection and sustainable development are connected. Such connection is considered highly important for Venezuela, where fossil fuel abundance has created economic and environmental challenges. Surprisingly, only lim

Breaking the carbon curse: The role of financial development in facilitating low‐carbon and sustainable development in Algeria

“…Specification 1 shows that a 1% increase in financial sector development can reduce CO 2 emissions by 0.31% in the long run, implying that financial sector development can support carbon mitigation strategies in Algeria. This condition is in line with the findings of Gill et al (2019), Gokmenoglu et al (2021), Nwani (2021), and Nwani and Omoke (2020) for Malaysia, Turkey, Venezuela, and Brazil, respectively. The long‐run coefficient of urban population growth (ln UB ) is positive but statistically significant only in specification 1, with a 1% increase in urban population growth (ln UB ) generating a 0.48% increase in CO 2 emissions.…”

“…This confirms the oil resource abundance curse in Algeria via domestic oil consumption, supporting the exploratory data analysis presented by Friedrichs and Inderwildi (2013). Comparing these findings to related studies from other economies, the results are similar to the condition identified by Awodumi and Adewuyi (2020) and Nwani (2021) for Angola and Venezuela respectively but differ significantly from the environmental impact of natural resource abundance in five European economies, as reported by Balsalobre‐Lorente et al (2018). Another study that reported similar evidence is Farhani and Balsalobre‐Lorente (2020) for the environmental impact of coal, gas and oil in China, the United States, and India.…”

“…Granger causality analysis conducted by the study identified a number of causal linkages among the variables, which include: unidirectional causality from economic growth to CO 2 emissions in China and the United States, from CO 2 emissions to gas and coal consumption in China, bidirectional between oil consumption and economic growth in the United States, and unidirectional causality from coal consumption to CO 2 emissions. Other recent empirical studies attributing environmental quality challenges to economic conditions created by fossil fuel abundance and consumption include Raggad (2018) for the case of Saudi Arabia, Hajilary et al (2018) for the case of Iran, Nwani (2021) for the case of Venezuela, and Awodumi and Adewuyi (2020) for the case of oil producing economies in Africa. Contrary to the evidence from these studies, Balsalobre‐Lorente et al (2018) showed that natural resource abundance mitigates CO 2 emissions in a panel of five big European economies (Germany, France, Italy, Spain, and the United Kingdom) relying on data for the 1985–2016 period.…”

“…Giving these economic conditions expected from financial development, the energy substitution habit of households and firms in the economy could be altered (Charfeddine & Kahia, 2019; Moghadam & Dehbashi, 2018). This suggests that the amount of fossil fuels in the energy consumption mix could decrease with policy options designed to strengthen the depth of financial intermediation (Nwani & Omoke, 2020; Nwani, 2021; Omoke et al, 2020).…”

“…So far, recent empirical studies on the impact of financial development on CO 2 emissions have presented mixed results. For example, Gill et al (2019), Gokmenoglu et al (2021), Nwani (2021), and Nwani and Omoke (2020) show that financial development reduces CO 2 emissions in Malaysia, Turkey, Venezuela, and Brazil, respectively, while Ibrahiem (2020), Iorember et al (2020), Khan et al (2021), and Shahbaz et al (2020) show it increases CO 2 emissions in Egypt, Nigeria, Pakistan, and the United Arab Emirates, respectively. Despite the growing interest on the topic, empirical evidence within the context of the Algeria economy is still scarce and lacking to the best of our knowledge.…”