Causality analysis of CO2 emissions, foreign direct investment, gross domestic product, and energy consumption: empirical evidence from South Asian Association for Regional Cooperation (SAARC) countries

Does foreign direct investment influence carbon emission-related environmental problems? Contextual evidence from developing countries across Sub-Saharan Africa

Sub-Saharan African nations face multifaceted environmental problems, especially those associated with carbon discharges. Hence, this study calculates a composite carbon index in the context of 39 developing nations from this region and uses it as a proxy for the carbon emission-related environmental problems they have faced during the 2000-2020 period. This index is estimated by utilizing data regarding annual carbon dioxide discharges, output-based carbon productivity rates, and energy consumption-based carbon intensity levels in the concerned countries. Hence, policy takeaways from this study have critical relevance for the selected sub-Saharan African nations to help them achieve the objectives related to the Sustainable Development Goals agenda and the Paris Accord. Overall, the findings from the econometric analyses verify that more receipt of foreign direct investment initially raises but later on reduces environmental problems. Thus, the nexus concerning these variables depicts an inverse U-shape. Besides, the results endorse that greening the energy consumption structures of the sampled sub-Saharan African countries helps to abate their environmental problems in the long run while financial development aggravates the extent of environmental adversities that take place. Lastly, improving the quality of regulatory agencies enables the Sub-Saharan African nations to further mitigate their environmental problems. Moreover, these aforementioned findings are observed to be heterogeneous across low- and middle-income categories of the selected Sub-Saharan African countries. Furthermore, the heterogeneity of the findings is also confirmed by the outcomes derived from the country-specific analyses. Nevertheless, these nations should attract clean energy-embodying foreign direct investment, make their energy consumption structures greener by amplifying renewable energy adoption rates, introduce green funds to develop their financial sectors, and make their environmental regulatory agencies more transparent with their activities.

Democracy, green energy, trade, and environmental progress in South Asia: Advanced quantile regression perspective

Unquestionably, the industrial revolution of the twenty-first century contributes to global warming. Excessive amounts of carbon emissions into the atmosphere are responsible for global warming. Therefore, this research aims to assess the impact of GDP, green energy consumption, population, trade openness, and democracy on CO2 emissions in four selected South Asian countries from 1990 to 2019. This research also attempts to evaluate the EKC hypothesis in terms of economic growth (GDP2). The unit root of panel data and cointegration tests are executed in this study as a prelude to the regression analysis. Quantile regression for panel data, which (Powell, 2016) devised to deal with the fixed effect problem, is used in this study, and (Powell, 2016) empirical findings are the main focus. The estimated coefficient of GDP is positively significant, demonstrating that economic activity increases the burning of fossil fuels and upsurges atmospheric CO2 emissions. After attaining economic development, the reversed U-shaped EKC theory is valid for four selected South Asian countries. Economic development encourages these countries to use green technology, which helps mitigate CO2 emissions. The research, however, reveals that green energy is to blame for CO2 emissions. Burning biomass releases carbon dioxide that negatively impacts the quality of the environment. The study confirms that human activities are the leading contributor to environmental deterioration. Population growth has a worsening effect on the environment. The association between population and CO2 emissions is positively significant. The estimated coefficient of trade openness is positive, which increases CO2 emissions significantly. The estimated coefficient of democracy is quite negative. Therefore, this study suggests prioritizing democracy to reduce CO2 emissions. Citizens who live in democracies are better informed, more organized, and able to protest, all of which contribute to increased government responsiveness to environmental preservation. The results of the Wald test support the differential effects at various quantiles. The Dumitrescu-Hurlin (2012) panel causality tests are also used in this analysis to check causality between variables. Based on the findings, this research makes many policy suggestions for lowering carbon emissions.

Does excessive energy utilization and expansion of urbanization increase carbon dioxide emission in Belt and Road economies?

The phenomenal increase in global temperature and variation in climate change are the replications of nature, alarming governments to limit the emissions of greenhouse gases (GHGs) and adopt green innovation and environmental-friendly clean and green technologies. In this paper, we empirically investigate whether there are any changes in excessive consumption of energy from conventional sources, expansion of urbanization, carbon dioxide (CO₂) emissions, and economic growth in six different regions, namely, East Asia (EA), South Asia (SA), Southeast Asia (SEA), Central Asia (CA), Eastern Europe (EE), and the Middle East and North Africa (MENA), under the Belt and Road Initiatives of panel data over the period of 1985 to 2017. The empirical methods include a panel co-integration check, heterogeneity test, panel Granger causality test, pooled mean group (PMG), and augmented mean group (AMG). To verify the outcomes, robustness tests were carried out using the fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) approaches. Our results confirm that CO₂ emissions are primarily influenced by excessive utilization of conventional energy, economic growth, and expansion of urbanization. The findings confirm the co-integrating relationships among the variables in all six regions. Moreover, the panel causality analysis identified a bidirectional causal relationship between energy consumption, economic growth, urbanization, and CO₂ emissions. While these results can play an instrumental role in formulating CO₂ emission policies among our selected countries, our research can also assist policymakers and governments in other developing countries implement important policy initiatives. In this regard, the findings suggest that the current environment-related polices of Belt and Road Initiatives (BRI) do not efficiently tackle CO₂ emissions. In order to achieve the CO₂ emission degradation objective, the Belt and Road countries should restructure their environment-related policies by limiting the consumption of conventional energy and expansion of urbanization. The adaptation and establishment of such a panoramic policy program can assist emerging economies to acquire consolidated and environmentally sustainable economic growth.