Chapter 1 - The impact of transport infrastructure development on carbon emissions in OECD countries

Abstract

This chapter seeks to probe the effect of transportation infrastructure development on carbon (CO2) emissions in 26 Organisation for Economic Co-operation and Development (OECD) countries for the time between 1960 and 2018 while accounting for GDP, GDP squared, energy consumption, population size, urbanization, trade openness, financial development, and foreign direct investment. Our results suggest that air transport infrastructure significantly increases CO2 emissions while rail transport infrastructure does not influence CO2 emissions. The study also revealed that the interaction between air transport infrastructure and GDP does not influence CO2 emissions while the interaction between rail transport infrastructure and GDP significantly induces higher CO2 emissions. Also, air and rail transport infrastructure reduce carbon emissions via energy consumption. The study confirmed that population size and energy consumption significantly induce higher CO2 emissions while trade openness, financial development, and foreign direct investment contribute significantly to CO2 emissions mitigation. The implications of these results for environmental sustainability and climate change policy are discussed.