Assessment of the role of trade and renewable energy consumption on consumption-based carbon emissions: evidence from the MINT economies.

Abstract

This research formulates a theoretical framework to investigate the impacts of trade on consumption-based carbon emissions (CCO2) and also takes into account the influence of financial development and renewable energy use utilizing panel data for Mexico, Indonesia, Nigeria, and Turkey (MINT) nations between 1990 and 2017. The study utilizes a series of second-generation techniques such as Westerlund cointegration, cross-sectional augmented autoregressive distributed lag (CS-ARDL), and augmented mean group (AMG) tests to capture the linkage between CCO2 emissions and the independent variables. The study aims to answer the following questions: (a) can exports and imports determine CCO2 emissions in the MINT nations? (b) Is there a long-run association among the variables under investigation? The results of the Westerlund cointegration reveal a long-run association among the variables. The CS-ARDL outcomes indicate that imports and economic growth increase CCO2 emissions, while renewable energy use and exports decrease CCO2 emissions. Moreover, the outcomes of the AMG test also give credence to the CS-ARDL results. Our key policy recommendations are that initiatives, rules, and regulatory mechanisms should be implemented that promote the transformation toward renewable energy.