Modelling the nonlinear relationship between CO2 emissions from oil and economic growth

The purpose of this paper is to examine the relationship between carbon dioxide (CO2) emissions from oil and GDP, using panel data from 1971 to 2007 of 98 countries. Previous studies have discussed the environmental Kuznets curve (EKC) hypothesis, but little attention has been paid to the existence of a nonlinear relationship between these two variables. We argue that there exists a threshold effect between the two variables: different levels of economic growth bear different impacts on oil CO2 emissions. Our empirical results do not support the EKC hypothesis. Additionally, the results of short-term analyses of static and dynamic panel threshold estimations suggest the efficacy of a double-threshold (three-regime) model. In the low economic growth regime, economic growth negatively affects oil CO2 emissions growth; in the medium economic growth regime, however, economic growth positively impacts oil CO2 emissions growth; and in the high economic growth regime, the impact of economic growth is insignificant.     

Can innovation shocks determine CO2 emissions (CO2e) in the OECD economies? A new perspective

ABSTRACT

This study has attempted to address prior knowledge gaps in the environmental economics literature by integrating the innovation shocks into the Environment Kuznets Curve (EKC) equation for twenty-six OECD economies using data from 1990 to 2014. Foreign direct investment (FDI), exports (EXP), renewable energy consumption (REC), and GDP per capita were included as control variables. The results from multiple empirical analyses indicated that positive shocks to innovation improve, but the negative shocks disrupt environmental quality. Data analyses also showed that a positive correlation exists between income per capita of OECD economies. From the negative coefficient of income per capita (squared) and the existence of a negative nexus between FDI and CO2e, both the EKC and the Pollution Halo Hypothesis (PHH) were confirmed in sampled economies, respectively. The paper offers empirical support for the favourable impacts of REC on the quality of the environment and calls for the adoption of innovation shocks as a policy instrument to formulate better environmental policies for a sustainable future.     

Predicting long-run risk factors of stock returns: Evidence from Australia

This study utilises the stock market data provided by the Australian Equity Database to analyse the long-run relationship between Australian stock returns and key macroeconomic variables over the period 1926–2017. To measure the diverse risk factors in the stock market, we examine the possible determinants in four main categories: real, financial, domestic and international. Our results reveal that historical stock returns are strongly connected to financial and international factors as compared to real and domestic factors. Both the 1973–1974 OPEC Oil Price Crisis and 2007–2008 Global Financial Crisis had dampening effects on stock returns. There is a positive association between the US and Australian stock markets in the long-run. These findings on stock market dynamics and their linkages with domestic and international macroeconomic policy changes in the long-run have important implications for traders and practitioners.     

Energy consumption, economic growth, and carbon emissions: Challenges faced by an EU candidate member

This paper investigates the long run Granger causality relationship between economic growth, carbon dioxide emissions and energy consumption in Turkey, controlling for gross fixed capital formation and labor. The most interesting result is that carbon emissions seem to Granger cause energy consumption, but the reverse is not true. The lack of a long run causal link between income and emissions may be implying that to reduce carbon emissions, Turkey does not have to forgo economic growth.     

Adoption of digital repositories for CO2 emissions reduction: the case of Korea

This study aims to estimate the potential economic benefits, energy and CO₂ emissions reductions when using trusted third-party digital repository (TTPR) services in one individual bank, and within the banking industry in Korea. First, the cost, benefit and net benefit of using TTPR services in the banking industry are estimated. Second, the net induced output effect is estimated. Third, based on an environmentally extended input–output analysis, CO₂ emissions reduction was estimated as 1924.32 tons in 2009 and the energy consumption reduction as 640.70 TOE. Fourth, the total economic benefit, which is the sum of the net induced output effect and economic value of CO₂ emissions reductions, is approximately $11.04 million. The findings demonstrate that energy consumption and CO₂ emissions reductions are meaningful enough to result in significant economic benefits. Therefore, the Korean government should promote the use of TTPR services in the entire industry.     

Gender equality and economic growth in Brazil: A long-run analysis

This paper studies the long-run impact of policies aimed at fostering gender equality on economic growth in Brazil. The first part provides a brief review of gender issues in the country. The second part presents a gender-based, three-period OLG model that accounts for women’s time allocation between market work, child rearing, human capital accumulation, and home production. Bargaining between spouses depends on relative human capital stocks, and thus indirectly on access to infrastructure. The model is calibrated and various experiments are conducted, including investment in infrastructure, a reduction in gender bias in the market place, and a composite pro-growth, pro-gender reform program. The analysis showed that fostering gender equality, which may partly depend on the externalities that infrastructure creates in terms of women’s time allocation and bargaining power, may have a substantial impact on long-run growth in Brazil.     

The econometrics of the environmental Kuznets curve: an illustration using Australian CO2 emissions

Four econometric issues associated with the estimation and testing of the environmental Kuznets curve (EKC) are considered: (i) model specification with respect to the order of the polynomial, (ii) model specification with respect to the use of linear or log-linear specifications, (iii) integration and cointegration considerations, and (iv) missing variables and time trends. These issues are examined in reference to Australian data on four measures of CO2 emissions and three measures of per capita income. While evidence is provided for an inverted U-shaped EKC, the results cannot be generalized. It is concluded that without the use of sensitivity analysis, the results are typically fragile.     

Empirical study on the determinants of CO2 emissions: evidence from OECD countries

This article empirically investigates the Environmental Kuznets Curve (EKC) for CO₂ emissions in the cases of 11 OECD countries by taking into account the role of nuclear energy in electricity production. The autoregressive distributed lag approach to cointegration is employed as the estimation method. Our results indicate that energy consumption has a positive impact on CO₂ emissions in most countries in the study. However, the impact of trade is not statistically significant. The results provide evidence for the role of nuclear power in reducing CO₂ emissions only in some countries. Additionally, although the estimated long-run coefficients of income and its square satisfy the EKC hypothesis in Finland, Japan, Korea and Spain, only Finland's EKC turning point is inside the sample period of the study, providing poor evidence in support of the EKC hypothesis.     

Club convergence and clustering of U.S. energy-related CO2 emissions

This study examines the convergence of energy-related carbon dioxide emissions among a panel of U.S. states between the period 1960–2010. This examination is carried out by means of a two-stage procedure. In the first stage, we conduct an endogenous grouping, regression-based convergence test. Unlike previous studies, this methodology endogenously identifies groups of states with emissions that are converging to a similar steady state growth path over time. In the second stage, we evaluate the conditional rate of convergence for the whole sample and for each club using panel data, fixed effects models that control for unobserved, time-invariant heterogeneous effects. More specifically, we examine the rates of convergence conditional on certain structural and non-structural characteristics of the state economy. Results from stage one and stage two suggest that one group of twenty-six states is converging to a unique steady-state equilibrium, and otherwise, the remaining states are diverging. Finally, we discuss different policy approaches to mitigating carbon dioxide emissions based on the club convergence hypothesis.     

A robust analysis of the relationship between renewable energy consumption and its main drivers

We provide a comprehensive and robust analysis of the drivers of renewable energy consumption for a panel of 64 countries, using both the static (Pooled OLS, Panel Fixed and Random Effects) and dynamic (difference and system GMM) panel data estimation approaches. We show that the dynamic panel data model provides more efficient estimators than the static ones and that increases in per capita CO₂ emissions and per capita trade with foreign partners mainly drive the changes in per capita renewable energy consumption. We also find limited evidence of oil price effects on renewable energy consumption, which reflects the fact that renewable energy is just a complement and not a perfect substitute of crude oil, at least in the short run.     

The economic policy uncertainty and firm investment in Australia

ABSTRACT

This paper examines the impact of economic policy uncertainty (EPU) on the Australian firm investment activity. We find a significant positive relationship between the EPU and the firm investment over 2002 to 2017 period. Our main results remain unchanged after several endogeneity tests. Further analysis reveals that this relationship becomes pronounced for firms if their headquarters located in small states, firms with more tangible assets, higher operating cash flows and cash holdings, higher profits and leverage, but firms with fewer dividend payouts. Our paper sheds lights on the unique attribute of the impact of the EPU on the Australian firm investment activity and offers important policy and managerial implications.     

The long-run causal relationship between exports and economic growth in the euro area

This article employs panel methods that mitigate heterogeneity and cross-sectional dependence to determine the direction and sign of long run causality between exports and economic growth in the euro area economies from 2000 to 2014. The empirical evidence indicates that there is a unidirectional long-run Granger causality relationship from exports to economic growth in the euro area countries.     

Status of CO2 emissions, driving forces and mitigation countermeasures of Tianjin, China

ncing energy efficiency, exploiting and using clean and renewable energy, advancing energy structure adjustments, and actively developing carbon capture and storage (CCS) technologies.     

Status of CO2 emissions; driving forces and mitigation countermeasles of Tianjin, China

Climate change is a long-term and important challenge facing the whole world. Mitigation of CO2 emissions is one of important measures responding to climate change. The task of responding to climate change facing each city is very urgent. The total amount of Tianjin City＆#39;s CO2 emissions from energy use and industrial processes is large and the amount of CO2 emissions per capita from fossil fuel combustion is quite high. Mitigation of CO2 emission in Tianjin City encounters many difficulties such as increasing population, rapidly growing economy, heavy industrial structure, backward tertiary industry, low level of energy efficiency and product technologies, and energy structure relying mainly on coal. This paper analyzes Tianjin City＆#39;s general situation of economic and social developments, estimates Tianjin City＆#39;s status of CO2 emissions using 2006 IPCC Guidelines for National Greenhouse Gas Inventories, analyzes Tianjin City＆#39;s driving forces of CO2 emissions by methodology to analyze the driving forces of energy-related CO2 emissions, and puts forward countermeasures mitigating CO2 emissions in Tianjin City, such as strictly controlling increasing population, expediting industrial structure adjustment, insisting on strategy of energy conserving, vigorously enhancing energy efficiency, exploiting and using clean and renewable energy, advancing energy structure adjustments, and actively developing carbon capture and storage （CCS） technologies.     

Modeling population dynamics and economic growth as competing species: An application to CO2 global emissions

Since the beginning of the last century the world is experiencing an important demographic transition, which will probably impact on economic growth. Many demographers and social scientists are trying to understand the key drivers of such transition as well as its profound implications. A correct understanding will help to predict other important trends of the world primary energy demand and the carbon emission to the atmosphere, which may be leading to an important climate change. This paper proposes a set of coupled differential equations to describe the changes of population, gross domestic product, primary energy consumption and carbon emissions, modeled as competing species as in Lotka-Volterra prey-predator relations. The predator-prey model is well known in the biological, ecological and environmental literature and has also been applied successfully in other fields. This model proposes a new and simple conceptual explanation of the interactions and feedbacks among the principal driving forces leading to the present transition. The estimated results for the temporal evolution of world population, gross domestic product, primary energy consumption and carbon emissions are calculated from year 1850 to year 2150. The calculated scenarios are in good agreement with common world data and projections for the next 100 years.     

Population and economic growth: a simultaneous equation perspective

This article examines the relationship between Population Growth (PG) and Economic Growth (EG) in the framework of simultaneous structural equation models. Based on Lewbel (2012), the structural parameters can be estimated using the Generalized Method of Moments (GMM). Identification requires a heteroscedastic covariance restriction that appears in some models of endogeneity, measurement errors and panel data. This study obtains several findings. First, the current and lagged variables of PG negatively and positively affect EG in the short run. Second, PG does not significantly influence EG in the long run. Third, the reverse relations running from EG to PG are weak in both the short and long run, regardless of economic development conditions.     

Impacts of an EC carbon/energy tax and deregulating thermal power supply on CO2, SO2 and NOx emissions

Emission of CO₂, SO₂ and NO_x are all closely linked to the burning of fossil fuels. Here we report on simulations done by linking a Sectoral European Energy Model (SEEM), covering energy demand in nine Western European countries, with the emission-transport-deposition model RAINS developed by IIASA. The study analyses emissions of CO₂, SO₂ and NO_x, deposition of sulphur and nitrogen and the extent of areas where the critical load for sulphur is exceeded in year 2000 under four different energy scenarios. Two different sets of future behavioural patterns for the thermal electric power production sector are considered. In one regime, called the plan-efficient regime, the sector is assumed to follow official plans with regard to investment in new capacity. In the other regime, called the cost-efficient regime, the thermal power sector is assumed to behave in a cost minimizing manner. The effects of the proposed EC carbon/energy tax are studied under both regimes, giving rise to altogether four scenarios.In both regimes the effect of the EC tax is to reduce emissions by between 6 and 10 per cent in year 2000 relative to the scenarios without the tax. A change of regime, from the regulated, plan-efficient regime to the market-based, cost-efficient regime, will, by itself, reduce emissions of CO₂ and NO_x by approximately 3 per cent, while SO₂ emissions are reduced by 13 per cent. The EC tax will reduce sulphur deposition by more than 5 per cent in the nine model countries under the plan-efficient regime. A change of regime further reduces the total deposition by 9 per cent. The area where depositions exceed the critical load is reduced by approximately 6 per cent in year 2000 by the tax in both regimes. Changing from the plan-efficient to the cost-efficient regime has a similar impact.Although the emission reductions due to the EC tax may seem modest, they are shown to have a sizeable effect on the technological abatement costs of reaching targets like those prescribed in the Sofia protocol on the stabilisation of NO_x emissions, and the Helsinki protocol on SO₂ emission reductions. This is part of what can be considered to be secondary benefits of the EC carbon/energy tax.     

Localized innovation, localized diffusion and the environment: an analysis of reductions of CO2 emissions by passenger cars

We investigate technological change with regard to CO₂ emissions by passenger cars, using a Free Disposal Hull methodology to estimate technological frontiers. We have a sample of cars available in the UK market in the period 2000–2007. Our results show that the rates of technological change (frontier movement) and diffusion (distance to frontier at the car brand level) differ substantially between segments of the car market. We conclude that successful policies should be aimed at the diffusion of best-practice technology, and take account of the different potential for further progress between different segments of the market (e.g. diesel vs. gasoline engines and small vs. large engines).

Examining the influencing factors of CO2 emissions at city level via panel quantile regression: evidence from 102 Chinese cities

Ascertaining the influencing factors of carbon dioxide emissions in Chinese cities is an important issue for policy-makers. This paper investigates the effect of several determinants on carbon emissions per capita in Chinese cities. Non-normally distributed and heterogeneous features of carbon emissions per capita in Chinese cities are considerably important. The empirical results demonstrate that GDP per capita has an increasingly positive impact on carbon emissions per capita due to the growth in household consumption. Urbanization has a slightly decreasing positive effect on carbon emissions per capita with a quantile increase resulting from continuous highway construction. Industrialization has a decreasing positive effect with carbon emission per capita quantile increases because of increasing energy efficiency and lower costs related to carbon reductions. The population has a decreasing negative effect on carbon emissions because of people’s increasing demand for environmental safety. The distributions of emissions per capita conditional on the 10th and 90th quantiles of independent variables also vary considerably. Specific policy implications are provided based on these results.     

An empirical analysis of the relationship between economic development and population growth in China

China has experienced a dramatic demographic transition since the latter half of the twentieth century, and thus, assessing the global economic implications is an important issue. This article uses time-series data on China to estimate the determinants of gross domestic product (GDP) per capita. According to the results of the presented co-integration analysis, population has a significantly negative impact on GDP per capita, while savings rate, total factor productivity and degree of industrialization have significantly positive impacts on GDP per capita. These results suggest that the share of the working-age population relative to the total population does not have a strong influence on GDP per capita. Therefore, the contribution of the working-age population to economic growth might not be as large as previously assumed. It is also possible that an increase in savings, remarkable industrialization and rapid technological progress have all stimulated economic growth in China greatly.