The effects of regional trade integration and renewable energy transition on environmental quality: Evidence from South Asian neighbors

Abstract

Improving environmental quality across South Asia has become one of the utmost important policy agendas of the concerned governments. The susceptibility of the majority of the South Asian countries to multifaceted climate change adversities has motivated the need to identify the factors that can function to ensure environmental sustainability across South Asia. Although several studies have highlighted the importance of globalization and cleaner energy use in tackling the environmental degradaton issues of the South Asian countries, very little is known regarding the impacts of regional trade and renewable energy transition in this regard. Hence, this paper aims to scrutinize the effects of enhancing intra-regional trade integration and undergoing renewable energy transition on per capita carbon dioxide emissions in the context of six South Asian nations between 1990 and 2016. The results from the recently developed cross-sectionally augmented autoregressive distributed lag regression approach, accounting for cross-sectional dependency and slope heterogeneity issues, reveal that facilitating trade among the South Asian neighbors reduces carbon emissions in both the short and long run. Moreover, enhancing the share of renewable energy in the aggregate energy consumption figures is also found to reduce carbon dioxide emissions in both the short and long run. Furthermore, both regional trade integration and renewable energy transition are found to jointly reduce carbon dioxide emissions in South Asia. The results also authenticate the existence of the environmental Kuznets curve hypothesis, while financial development and urbanization are found to boost carbon dioxide emissions only in the long run.

The relationship between renewable energy consumption, carbon emissions, output, and export in industrial and agricultural sectors: evidence from China

“…For example, Wang ( 2012 ) has investigated the panel data of 98 countries around the world from 1971 to 2007 and found that under a slow economic growth system, economic growth has a negative impact on CO 2 emissions; under a modest economic growth system, economic growth has a positive impact on CO 2 emissions growth; and under a rapid economic growth, the impact on economic growth is minimal (Charfeddine and Kahia, 2019 ). This result is consistent with the study of Murshed et al ( 2021a ), who concluded that economic growth promotes increased carbon emissions in the long run, but trade between neighboring countries has a positive role in reducing carbon emissions. On this basis, Khan et al found that economic growth in RCEP countries has a dampening effect on CO 2 emissions and supports the environmental Kuznets curve (EKC) hypothesis by studying the role of export diversification and compound country risk in carbon emission reduction.…”

The Non-Linear Effects of Energy Efficiency Gains on the Incidence of Energy Poverty

“…Hence, initially, a small gain in the energy efficiency level, synonymous with technological development in the preliminary phases, may not be sufficient in enhancing access to modern cooking fuels such as LPG. For instance, the extraction of LPG from natural gas production or during oil refining requires the application of the latest technology [70,71]. In contrast, the use of conventional solid biomass and firewood for cooking purposes does not require technological progress to a large extent.…”

Revisiting the energy-economy-environment relationships for attaining environmental sustainability: evidence from Belt and Road Initiative countries

“…This is because the developing countries are predominantly fossil fuel-intensive whereby a lion's share of their respective electricity outputs from gas, coal, and furnace oils (Rehman et al 2019;Murshed and Tanha 2021;Murshed et al 2021a). Besides, it is believed that the developing countries, in quest of globalization, tend to prioritize attainment of economic growth at the cost of environmental degradation (Murshed 2020a, b;Murshed et al 2021bMurshed et al , 2021c. Hence, under such circumstances, the execution of the BRI can be hypothesized to cause environmental distress across the developing countries that are members of this initiative.…”