• Energy Research

AbstractBy using quarterly data over the period 1970Q1‐2017Q4, this paper examines the dynamic causal relationship between globalization and energy consumption by using rolling and recursive rolling Granger causality methods. This study is pioneering effort to examine the dynamic causal relationship between globalization and energy consumption using time‐varying Granger causality tests for 20 top and bottom globalized economies. The empirical results reveal that the dynamic causality relationship between globalization and energy consumption is time‐varying. Although, the causal relationship could not be observed for some of the study periods, bidirectional causality is found in many sub‐samples. From the empirical findings, we observe that unidirectional causality running from globalization to energy consumption has grievous impact on trade and environmental quality. In general, our empirical results resonate with the previous findings of globalization energy‐driven hypothesis, with significant policy implications for top and bottom globalized countries.

This study attempts to unveil an additional dimension to economic freedom within the framework of the environmental Kuznet curve (EKC) hypothesis using the panel data for BRICS (Brazil, Russia, India, China, and South Africa) economies over the period 1995-2018. Firstly, the study found that the EKC hypothesis is valid only in the long run for the panel countries. Secondly, we found that economic freedom mimics the pattern of economic output. Thus, when economic freedom is employed in lieu of economic growth, the EKC hypothesis is also validated only in the long run. Importantly, when both economic freedom and output are employed alongside, they produce the same carbon mitigation effect in each of the short-run and long-run periods. Thirdly, the country-specific evidence of the role of economic freedom and output in environmental quality is not less of a U-shaped relationship in the short run. Lastly, the impact of the bloc's energy mix (coal, natural gas, and oil energy utilization) on environmental quality is undesirable in both the short and long run; only in South Africa natural gas has the potential to mitigate carbon emissions. Overall, the study offers relevant policy measures for attaining Sustainable Development Goals (SDGs) target to combat climate change and its impacts.

Being among the highest emitters of greenhouse gases globally, the G7 countries have pledged to halve their carbon emissions by 2030, relative to 2010. This is in clear recognition of the need to transit from carbon energy to more sustainable solutions that are climate-friendly. In view of this, understanding how financial globalization contributes to the realization of those pledges becomes necessary. In this paper, we introduce two major innovations to the literature on financial globalization and environmental degradation. First, in terms of methodology, we apply the quantile-on-quantile regression (QQR) approach with a nonparametric technique over the period 1970Q1–2018Q4. The combination of these techniques has so far received limited attention in the literature. Second, we test for an asymmetric nexus between financial globalization and carbon emission in the G7 economies—Canada, France, Germany, Italy, Japan, the United Kingdom and the United States—as they present an interesting area of research focus. Empirical results from the QQ regression show an emission-increasing effect of financial globalization on environmental degradation in the G7 nations. Furthermore, in order to assess the causal effect of financial globalization on environmental degradation, we apply the nonparametric causality technique. Overall, results from the nonparametric estimations show that financial globalization significantly predicts variation in environmental degradation across quantiles. From a policy standpoint, economic and political frameworks in these nations should be directed towards enhancing higher financial inflows that are in line with the stated economic and environmental policies, among other policy suggestions.

This study examines the long-term effects of coal and geothermal consumption on carbon emission while controlling for globalization and economic growth toward carbon neutrality in newly industrialized countries, including Brazil, China, India, Mexico, Malaysia, the Philippines, South Africa, Turkey, Indonesia, and Thailand for the period of 1990-2008. We compare the resulting relationships from various estimation techniques, such as fixed-effect ordinary least squares, dynamic ordinary least squares, fully modified ordinary least squares, and method of moment quantile regression. Overall, this study determines that the consumption of coal and geothermal energy is a significant determinant with a causal effect on carbon emission. The rise in coal energy consumption significantly increases carbon emission across all quantiles (0.1-0.90), whereas the rise in geothermal energy consumption reduces it across all quantiles (0.1-0.90). This relationship is also consistent across all quantiles (0.1-0.9). Policy suggestions are proposed on the basis of these findings.

This research examines the linkage between financial risk and carbon emissions using a quarterly dataset spanning from 1991 to 2019 for top carbon emitting countries. To achieve the study objective, this study apply quantile-on-quantile regression (QQR), the quantile regression (QR) approach for robustness check, and the nonparametric predictive test that identifies causality in mean and variance. Empirical findings from the QQR technique disclose the following: (i) financial risk decreases carbon emissions in the USA, Russia, Germany, and Canada; (ii) in China, India, Japan, Brazil, and Indonesia, financial risk enhances carbon emissions (iii) while we find mixed reactions in the case of South Korea. The outcomes of the conventional quantile regression also confirm the QQR outcomes, while that of nonparametric causality discloses evidence of causality in majority of quantiles from financial risk to carbon emissions. Based on these empirical outcomes, policymakers in the financial risk-induced-environmental degradation regions should consider implementing policies or reforms that would keep financial systems sound, in order to prevent shocks to the environment, and its attendant multiplier impact on the environmental sustainability targets implemented to protect both the immediate and the future generations.

Abstract One of the major challenges several economies of the world is facing today is striking a balance between mitigating environmental degradation amidst the dire desire for economic growth and environmental sustainability. In order to reduce environmental pollution and sustain the environment, countries around the world are embarking on several policy measures to ameliorate climate change and reduce greenhouse gas emissions. On this premise, this study investigates the role of energy, real income and globalization in the quest to achieve environmental sustainability in the case of Italy using Autoregressive Distributed Lag model for empirical estimators and Toda and Yamamoto predictive methodology over the period 1970–2014. Based on empirical results, we found that a percent increase in kg oil equivalent per capita of energy consumed and globalization index led to 0.928% increase and 0.914% decrease in metric ton per capita of CO2 emissions in the short-run, and 1.796% increase and 1.769% decrease in metric ton per capita of CO2 emissions in the long-run, while the real income has no significant impact on the metric ton per capita of carbon emissions level both in the short- and long-run. The autonomous term also showed an interesting result, we found that, holding other factor constant, a percent increase in the constant term will lead to 1.879% decrease in metric ton per capita of carbon emissions in the short-run, and 3.635% decrease in metric ton per capita of carbon emissions in the long-run thus, we infer that Italy has been successful in balancing environmental conversation policies with macroeconomic objectives. This study provides credible policy suggestions for policymakers in energy intense economies around the world.

In this paper, we examine whether geopolitical risk influences environmental degradation, while controlling for non-renewable energy consumption, economic growth and trade openness, using a quarterly dataset from 1985Q1 to 2019Q4. The choice of India as a case study is based on a number of reasons. India is a developing country, which produces approximately 3.2% of global GDP. Also, India produces almost 17.7% of the world population. The country also emits about 6.8% of global carbon emissions, and according to the 2020 report of the consulting firm Eurasia, India is ranked fifth in terms of geopolitical risk. This study adds to the existing literature by using the quantile-on-quantile (QQR) regression to examine the effect of geopolitical risk on environmental degradation, as well as highlighting the implications of geopolitical risk on environmental sustainability. Based on empirical estimation, we find that geopolitical risk increases and decreases carbon emissions in India. That is, geopolitical risk increases environmental degradation at middle quantiles and decreases environmental degradation at lower and higher quantiles. In addition, we find that non-renewable energy consumption, economic growth and trade openness impede environmental quality in India. Thus, we are of the opinion that policymakers, when making policy decisions on environmental quality, should factor in geopolitical risk in two areas, mitigation and channel of escalation, among other policy suggestions.