The effect of energy consumption on the environment in the OECD countries: economic policy uncertainty perspectives

A bibliometric review analysis into environmental kuznets curve phenomenon: A retrospect and future direction

The present study presents a retrospect into environmental Kuznets curve hypothesis (EKC). The EKC debate is dated over four decade long and worthy of empirical scrutiny. To this end, the present study leverages on over 200 previous studies curated from SCOPUS and Web of science (WOS) core collection database respectively. The present study also presented both literature schematic on the evolution, trends, gaps, and future directions on the EKC debate. This paper endeavors to enhance our comprehension of the inherent paradoxes present in sustainability discourses by delving into the fundamental assumptions underlying the Environmental Kuznets curve (EKC). By conducting a bibliometric analysis, we aim to shed light on the factors contributing to the prominence of thematic keywords within sustainability discourses. This study seeks to provide valuable insights into these dynamics and implications on sustainability debates. Key empirical findings outlines predominant and influential studies and journal outlets on the theme under consideration. The present study bibliometric analysis displays that Ozturk i. with 13 published papers 3153 citations and a link strength of 2, Dogan e. Had 7 papers with 2190 citations with no link strength, Shahbaz. B 7 papers 1347 citations and 1 link strength, Saboori b.7 papers 677 citations 1 strength link and Liu y. 6 papers 582 citations with no link strength. From a policy dimension, the present bibliometric study presents valuable depth on the evolution and development of the EKC phenomenon by identifying's the extant literature leaders, action-step for future studies on environmental sustainability without compromise on economic growth as the EKC theme express the tradeoff between economic growth and environmental degradation. Further insights are rendered in the concluding section.

Navigating carbon emissions in G-7 economies: a quantile regression analysis of environmental-economic interplay

This study employs panel data from 1990 to 2020 for the G-7 countries (Canada, France, Germany, Italy, Japan, the UK, and the USA) and employs the examination of heterogeneous slope coefficients and cross-sectional dependence tests as preliminary steps before conducting cointegration analysis and second-generation unit-root tests. This study employs the method of movement quantile regression (MMQR) to analyze long-run and short-run relationships. The findings from the MMQR model indicate that economic growth and imports have a negative impact on consumption-based CO2 (CCO2) emissions, which worsens at higher quantiles. On the other hand, exports, energy efficiency, and renewable energy output (REO) have a positive effect on mitigating CCO2 emissions, with this effect becoming more pronounced at higher quantiles. Furthermore, the robustness of the results was confirmed through rigorous checks using quantile regression with optimized Markov Chain Monte Carlo techniques, which is a reliable non-parametric approach. These checks consistently demonstrated a significant impact on CCO2 emissions, thus validating the findings obtained from MMQR. Based on the outcomes, this study recommends that each G-7 nations should make efforts to regulate their CCO2 emissions by adopting measures that foster ecological equilibrium. Moreover, fostering export-driven sectors, exploring innovative strategies for REO, and improving energy efficiency are crucial measures for effectively tackling CCO2 emissions within the G-7 countries. The study highlights that renewable energy output (REO) and energy efficiency effectively mitigate CCO2 emissions at higher quantiles, suggesting the importance of policy measures supporting their development. Additionally, policies targeting import reduction, export promotion, and carbon pricing mechanisms emerge as strategies to curb emissions and foster sustainable development.

Assessing the impact of trade policy uncertainty on pollution emissions: an analysis of Chinese firms' green transformation

Oscillations in the global trade milieu have exacerbated the ambiguity experienced by Chinese enterprises, thereby influencing their ecological transition. The ongoing debate over whether trade uncertainty augments corporate emissions, exacerbating pollution, or attenuates emissions, encouraging sustainable production, has yet to reach a consensus. The current investigation employs a textual analysis methodology to explore the influence of trade policy uncertainty on pollution emissions, by sourcing indicators of trade policy uncertainty that echo firm-level uncertainty within the period 2008 to 2021. Utilizing the fixed effects model for our analysis, the findings substantiate that escalated uncertainty at the micro-level catalyzes an increase in pollution emissions originating from firms. Crucially, we find that risk diversification and innovation bolster firms' capacities to manage pollution under escalating uncertainty. Furthermore, our estimation reveals that enterprises with low market competitiveness, high financial constraints, and moderate overseas market share are most significantly impacted, whereas those with robust patent portfolios remain largely unaffected. This study carries considerable implications for firms striving to achieve an ecological transition and offers insights for fostering sustainable and high-quality global economic development.

Investigating the nexus between trade policy uncertainty and environmental quality in the USA: empirical evidence from aggregate and disaggregate level analysis

Worldwide, environmental sustainability is a hot topic, particularly in industrialized countries due to their higher emission intensity. Environmental conservation and equitable economic growth have been prioritized in economic debate and policy development. Over the past three decades, the USA's emissions of carbon dioxide (CO₂e) have risen exponentially, as trade policy uncertainty (TPU). In this circumstance, this paper aims to contribute to the existing literature by exploring the effect of TPU on environmental quality by controlling the energy consumption, economic growth, and population in the USA over the period 1985M1 to 2022M3 employing the augmented ARDL and NARDL procedures in the presence of structural breaks. From our analysis, the results revealed that TPU affects negatively CO₂e in the residential sector, and negative changes in TPU positively affect CO₂e in the commercial sector both in the long and short run. On the other side, the outcomes show that energy consumption is a crucial key determinant factor in environmental degradation at the aggregate level and in all sectors. Furthermore, our findings clarify that economic growth upsurges the CO₂e at the aggregate level precisely in the industrial and residential sectors. Juxtaposing, in the long run, the results indicate that population growth could make additional pressure on environmental quality at the aggregate level, especially in commercial, power generation, and residential sectors. Accordingly, it is clear from our results that the regulations put in place to encourage Americans to buy locally created goods instead of those imported, especially in light of the high levels of TPU, maybe the best option to decrease the long-term impact of international trade on the environment to achieve sustainable development goals (SDGs).

The impact of economic uncertainty, economic growth and energy consumption on environmental degradation in MENA countries: Fresh insights from multiple thresholds NARDL approach

This paper explores the influence of economic policy uncertainty on environmental quality in selected MENA countries depending on an augmented STIRPAT model over the period 1970-2020. ARDL model and its extensions like augmented ARDL, augmented NARDL, and MTNARDL models are applied to detect any possible effect from uncertainty index to carbon dioxide (CO₂) emissions. The empirical results reveal the validity of environmental Kuznet curve (EKC) curve in all the countries. Moreover, the results show that the uncertainty index enhances environmental degradation, especially in extremely large changes in Morocco, Turkey, and Iran. Besides, the findings reveal that energy consumption and population in the entire sample escalates CO₂ emissions over the study period. Consequently, policymakers in MENA countries should consider the economic uncertainty index, particularly in light of its recent rise, when developing any strategies and plans aimed at improving environmental standards, as well as the need to encourage the use of renewable energies in order to increase the percentage of their contribution to total energy consumption.

Investigating the moderating role of economic policy uncertainty in environmental Kuznets curve for South Africa: Evidence from the novel dynamic ARDL simulations approach

South Africa, one of the emerging markets and fast-developing economies in Sub-Saharan Africa recognised for varying world's natural assets on the international market, has recorded significant economic growth in the previous several years. However, aside from the ecological repercussions of energy generation, how economic uncertainties moderate the effects of energy intensity, renewable and non-renewable energy usage, and economic complexity on the environment has largely gone unnoticed. As a result, this paper addresses an important empirical vacuum by exploring the moderating influence of economic policy uncertainty in the environmental Kuznets curve for South Africa from 1960 to 2020. Results from the novel dynamic autoregressive distributed lag simulations framework reveal the following key findings: (i) economic policy uncertainty accelerates environmental degradation in both the short and long run; (ii) economic growth (as measured by the scale effect) increases environmental degradation, whereas the square of economic growth (as measured by the technique effect) slows it down, confirming the presence of the environmental Kuznets curve (EKC) hypothesis; (iii) environmental quality is deteriorated by energy intensity, economic complexity, non-renewable energy usage, and trade openness; (iv) the use of renewable energy and technological innovation increase environmental quality; (v) whereas the moderating effects of economic policy uncertainty on the environmental impacts of energy intensity, renewable and non-renewable energy consumption result in an increase in environmental destruction, its moderating effect on environmental implication of economic complexity plays an important role in improving environmental quality. These findings permit us to draw important policy recommendations for South Africa for improving environmental quality.

The impact of fiscal decentralization, green energy, and economic policy uncertainty on sustainable environment: a new perspective from ecological footprint in five OECD countries

The paper explores the short-run and long-run asymmetric impact of fiscal decentralization, green energy, and economic policy uncertainty on environmental sustainability proxied by ecological footprint. Using the Nonlinear Autoregressive Distributed lag (NARDL) approach in selected five OECD countries, we find that ecological footprint responds to positive and negative fiscal decentralization asymmetrically in the long run and short run. However, the nature of the response varies significantly across countries. The result also suggests that green energy is a major factor in reducing the ecological footprint in all countries except Canada. Finally, economic policy uncertainty plays a negative and significant role in the ecological footprint in the UK, USA, and Germany while insignificant in Australia and Canada. Implications for effective environmental policies are discussed.

Policy uncertainty, economic activity, and carbon emissions: a nonlinear autoregressive distributed lag approach

Over the last few years, economic uncertainty has become a global concern. Not only has its impact on economic activities, but there are pieces of evidence that show uncertainty can be the reason for CO₂ emissions. It is also expected that the economic policy uncertainty may decrease or delay economic production, which may lead to a reduction in carbon emissions. Furthermore, uncertainty may decrease friendly environment policies and budgets, which cause an increase in carbon emissions. Thus, there may be an asymmetric relationship between economic uncertainty and the amount of CO₂ emissions. This study investigates the effects of economic policy uncertainty and economic activity on carbon emission applying a nonlinear autoregressive distributed lag (NARDL) cointegration approach in Iran between 1971 and 2018. Findings show that both policy uncertainty and economic growth contribute to CO₂ emissions. The negative and positive shocks of GDP and uncertainty index on CO₂ emissions in both the short run and long run are significant. Based on the results, there is an asymmetric effect of economic production on CO₂ emissions in Iran. The results of analyzing asymmetric effects of economic uncertainty show a symmetric relationship between uncertainty index and CO₂ emissions, in a way that a shock in the uncertainty index lowers carbon emission. To sum up, since uncertainty may affect the analysis of carbon emissions incorrectly, some environmental policies such as allocating a budget for R&D on clean energy and environmental taxes must be implemented.

Do economic policy uncertainty and environment-related technologies help in limiting ecological footprint?

Economic policies related to energy and the environment are found uncertain in developing economies. Renewable energy sources are gradually increasing in energy structure (ES) with the adoption of environment-related technologies (ERT). However, least attention is paid to investigating the nexus of economic policy uncertainty (EPU), ERT, ES, and ecological footprint (EF). Therefore, this study is an effort to examine the EPU, ERT, ES, and interaction of EPU and ERT on EF for BRICS economies under the umbrella of the STIRPAT model. By using the data from 1992 to 2020, findings are estimated through "cross-sectional dependence (CD test); CIPS and CADF unit root test; Westerlund's co-integration; and CS-ARDL, AMG, and CCEMG." Findings unveiled the negative role of EPU on EF. Furthermore, the role of RE and ERT is positive and substantial in decreasing the environmental degradation in BRICS. Therefore, the BRICS economies are suggested to be consistent on economic policies to catch the positive impact of ERT. Findings are robust to the policy implications.

Impact of financial inclusion and green bond financing for renewable energy mix: implications for financial development in OECD economies

The study aims to empirically estimate the nexus of green bond financing with renewable energy index OECD countries. Using the OECD countries data over the period of the 2011-2019, the study estimated the nexus between constructs. To justify the study findings and present widespread policy implications on recent topicality Padroni unit root test, FMOLS and DOLS technique is applied. For robustness analysis, long-run sensitivity analysis using FMOLS extension is used, and a comparative picture of green bond financing nexus with renewable energy index is presented. The study presented the consistent effects of green bond financing on renewable energy index indicators. This asymmetrical role of green bonds is confirmed on renewable energy indicators over the sample period. OECD countries injected 31% role of green bond financing on renewable energy index constructs, and it raised 9.4% of per unit energy efficiency in renewable energy systems; by this, the study findings warrant maximum support through public office, energy ministries, and departments for energy efficiency optimization. The study presents multiple policy implications to enhance renewable energy generation for energy efficiency through different alternative sources. Despite growing literature, the empirical discussion on this topicality is still shattered and less studied, which is extended and contributed by recent research. Furthermore, efficient regulation in the renewable energy sector may convert financial uncertainty into a huge opportunity. Investing in renewable energy stocks might help investors diversify their portfolios.

Asymmetric impact of energy utilization and economic development on environmental degradation in Somalia

While there are enormous studies on climate change in stable countries, climate policy perspectives from conflict-prone regions including Somalia are limited. It is noteworthy that environmental degradation is an alarming issue that fuels the vulnerability of Somalia to climate change. To this end, this study investigates the asymmetric impact of energy and economic growth on environmental degradation in Somalia-by employing nonlinear autoregressive distributed lag model (NARDL) and causal techniques from 1985 to 2017. We find asymmetric long-term cointegration among the variables, whereas energy consumption and economic growth asymmetrically affect environmental degradation. Besides, the causal inferences reveal unidirectional causality from environmental pollution to positive change in energy consumption. Additionally, a bidirectional causality is observed between population growth and negative change in economic growth. A unidirectional causality is confirmed: from positive shock in economic growth to population growth-from a negative change in economic growth to negative shock in energy consumption-from positive change in economic growth to positive shock in energy consumption-and from a negative change in energy consumption to population growth. This calls for the implementation of clean energy investment and modern environmental strategies including good farming methods and improved grazing land policies. The adoption of these policies will improve both environmental quality and sustained economic development.

The anthropogenic consequences of energy consumption in the presence of uncertainties and complexities: evidence from World Bank income clusters

In environmental management, many studies have examined the energy consumption-emission nexus in detail. However, for the first time in the literature, this study considers how the Economic Complexity Index (ECI) and economic policy uncertainty (EPU) moderate the contribution of energy consumption to emissions for the four World Bank Income clusters. The system generalised methods of moments are applied to data for 109 countries from 1996 to 2016. Based on the main model (grouped clusters) estimations, the result revealed the existence of the environmental Kuznets curve (EKC) hypothesis. Also, an increase in air transport and consumption of energy releases more carbon emissions to the climate. Interestingly, ECI decreases carbon emission significantly while EPU does not have a significant impact. Moreover, the study revealed that ECI moderated the impact of other variables on emission, but EPU is not a significant moderator. Furthermore, a comparative analysis among the four incomes suggests that the EKC hypothesis holds only in the high-income clusters; ECI is a significant predictor of carbon emission in the four clusters, but it only decreases the emission in high-income clusters. This corroborates the debate on climate change and the productive capacity of high-income countries. Given the foregoing, several policy measures were recommended.

Spillovers from global economic policy uncertainty and oil price volatility to the volatility of stock markets of oil importers and exporters

Economic policy uncertainty generally tends to induce a pessimistic view of future market behaviour. Furthermore, instabilities in global oil prices have serious implications for the economies of oil exporters and importers, due to their over-dependence on crude oil for revenue and production activities, respectively, and thereby on stock market indices. Against limited empirical evidence, this study examines the spillover effects from global economic policy uncertainty (GEPU) and oil price volatility to the volatility of the stock market indices of oil exporters and importers in both developed and emerging economies. The results show that the spillover effect from GEPU to oil exporters is relatively smaller than to oil importers, for both developed and emerging countries. Conversely, the volatility spillovers from oil prices to oil exporters are relatively larger than to oil importers, for both developed and emerging countries. Specifically, the volatility spillovers from oil prices to oil exporters (importers) in emerging countries are relatively stronger compared to oil exporters (importers) in developed countries. The findings indicate that the volatility of the stock markets of emerging countries is more sensitive to global factors such as GEPU and oil price volatility, and that oil exporters and importers in emerging economies are more sensitive to oil price volatility than oil exporters and importers in developed economies, which is in line with previous studies.

Environmental quality and the role of economic policy uncertainty, economic complexity, renewable energy, and energy intensity: the case of G7 countries

This study explores the environmental impacts of economic policy uncertainty, economic complexity, renewable energy, and energy intensity on the countries in the Group of Seven (G7) countries. To this end, the study employs fully modified ordinary least squares and a fixed effects model with Driscoll and Kraay, Rev Econ Stat 80:549-560, (1998) robust standard errors and a panel dataset from 1997 to 2015. The findings demonstrate a long-term relationship between the variables of interest and carbon dioxide emissions and the ecological footprint. Specifically, high energy intensity increases environmental pollution while high economic policy uncertainty and renewable energy reduces environmental degradation. The environmental Kuznet curve of economic complexity and environmental quality holds for G7 countries. Moreover, economic policy uncertainty strongly moderates the environmental effect of renewable energy, economic complexity, and energy intensity. Specifically, although economic policy uncertainty amplifies the beneficial environmental effects of renewable energy and economic complexity, it enlarges the harmful effect of energy intensity on environmental quality. These empirical outcomes allow us to draw useful implications for policy makers to mitigate the environmental degradation.