The effects of trade openness on decoupling carbon emissions from economic growth – Evidence from 182 countries

Abstract

The current rise of protectionism has become the main uncertainty associated with global energy, economy, and the environment. Furthermore, the decoupling carbon emissions from economic growth is crucial for implementing Intended Nationally Determined Contributions (INDCs). These INDCs would be discounted if decreasing carbon emissions would require sacrificing economic growth. This study explored the effect of protectionism (by measuring trade openness based on available data) on the decoupling carbon emissions from economic growth. For this, the heterogenous effects of trade openness on carbon emissions were investigated using in data of 182 countries from 1990 to 2015. The results show that trade openness decreased carbon emissions in high-income and upper-middle-income countries, while having no significant impact on carbon emissions of lower-middle-income countries; even worse, for low-income countries, trade openness increased carbon emissions. The heterogeneous effects of trade openness on carbon emissions indicate that trade openness positively impacts the decoupling economic growth from carbon emission in rich countries, but negatively impacts poor countries. In addition, increasing individual incomes and population distort the decoupling economic growth from carbon emissions. Renewable energy and high oil prices contributed to the decoupling economic growth from carbon emissions. These effects are similar in all countries. Targeted policy implications are presented that enable the decoupling economic growth from carbon emissions for countries with different income levels.

Beta decoupling relationship between CO2 emissions by GDP, energy consumption, electricity production, value-added industries, and population in China

“…Hence, RUL and GDP attitudes are indicated a highly negative and indirect effect on CO2 emissions by lack of technology during 2015-2020 Fig 5. [5,53]. The BDT consisted of decoupling mechanisms by an individual change in variation (years) covariance, variance, alpha, beta, and decoupling analyzed the actual change in CO2 emissions by GDP, primary energy consumption, electricity generation, value-added industries, and population.…”

What does the China’s economic recovery after COVID-19 pandemic mean for the economic growth and energy consumption of other countries?

“…At the same time, economic growth may lead to more energy consumption ( Lee and Chang, 2005 ; Wang and Zhang, 2020 ). With the growth of global economy, international trade has developed rapidly ( Shahbaz et al, 2017 ; Wang and Zhang, 2021 ). According to the data collected from the World Development Indicators database, the share of global imports and exports of goods and services in GDP increased from 38.53% in 1991 to 59.65% in 2014 ( The World Bank, 2020 ).…”

Does Energy Consumption and Trade Openness Contribute to Economic Growth in the East Asian Growth Area?

“…The author applied the generalized method of moments (GMM) to identify multiple-way linkages between variables. Furthermore, Wang and Zhang (2021) employed the Tapio decoupling model with the log-linear econometric found different situations among countries. The results from analysis for high and upper-middleincome countries that trade openness decreased carbon emissions while in energy consumption.…”