The impact of CO2 emissions on economic growth: evidence from selected higher CO2 emissions economies

Abstract

The main purpose of this work is to analyze the impact of environmental degradation proxied by CO2 emissions per capita along with some other explanatory variables namely energy use, trade, and human capital on economic growth in selected higher CO2 emissions economies namely China, the USA, India, and Japan. For empirical analysis, annual data over the period spanning between 1971 and 2013 are used. After using relevant and suitable tests for checking data properties, the panel fully modified ordinary least squares (FMOLS) method is employed as an analytical technique for parameter estimation. The panel group FMOLS results reveal that almost all variables are statistically significant, whereby test rejects the null hypotheses of non cointegration, demonstrating that all variables play an important role in affecting the economic growth role across countries. Where two regressors namely CO2 emissions and energy use show significantly negative impacts on economic growth, for trade and human capital, they tend to show the significantly positive impact on economic growth. However, for the individual analysis across countries, the panel estimate suggests that CO2 emissions have a significant positive relationship with economic growth for China, Japan, and the USA, while it is found significantly negative in case of India. The empirical findings of the study suggest that appropriate and prudent policies are required in order to control pollution emerging from areas other than liquefied fuel consumption. The ultimate impact of shrinking pollution will help in supporting sustainable economic growth and maturation as well as largely improve society welfare.

Economic Growth, Foreign Direct Investment and CO2 Emissions in China: A Panel Granger Causality Analysis

“…Leitao [26] found a significant positive relationship between CO 2 emissions and economic growth in Portugal. Azam et al [27] proved the same case for China, Japan, and the USA, while it is found significantly negative in case of India.…”

Rural–urban transformation, energy consumption, economic growth, and CO2 emissions using STRIPAT model for BRICS countries

“…A sequence of time series techniques has been employed to investigate the relationship between urbanization, energy use, and carbon emissions in the BRICS countries. This study follows the methodology applied by recent study of Azam et al in case of some selected countries. First, study conducts five panel unit root tests to examine the stationary properties of the underlying variables.…”

The relationship between energy consumption, economic growth and carbon dioxide emissions in Pakistan

“…The results indicated that fossil energy consumption have negative impacts on CO2 emission levels in Texas while energy consumption having positively influence on CO2 emissions in Florida but this impact is lower as compared to other states of US. Azam et al (2016) inspected the influences of CO2 emissions, energy use, trade, and human capital on economy growth from 1971 and 2013 for China, the USA, India, and Japan by utilizing panel fully modified ordinary least squares (FMOLS) for checking the association among the study variables. The examined results pointed out that CO2 emissions and energy consumption negatively and significantly influences the economic growth while trade and human capital positively and significantly influences the economic growth.…”