7 - Causes of environmental degradation in the Latin American and Caribbean region

Abstract

This chapter analyses the causality between economic variables and environmental damage through gas emissions for Latin America and the Caribbean (LAC) countries from 1960 to 2016, using the pairwise Granger causality tests from the gross domestic product (GDP), energy consumption, urbanisation, globalisation, economic complexity and population to carbon dioxide, nitrous oxide, methane and greenhouse gas emission. Causality runs from gross domestic product and energy consumption to all gas emissions. In the short run, nitrous emissions are strongly correlated with methane and greenhouse gases. Methane emissions are also strongly correlated with greenhouse gas emissions and only energy consumption is strongly correlated with CO2 emissions. CO2 emissions are caused by economic growth and energy consumption, while methane emissions are caused by social globalisation. Greenhouse emissions are caused by economic growth. The pairwise correlations between emissions are robust in the long run. Pairwise correlations between emissions per capita are small and show no statistical significance between CO2 emissions and nitrous dioxide emissions.