Could trade protectionism reshape the nexus of energy-economy-environment? Insight from different income groups

PurposeToday, the increasing use of fossil fuels, energy security, concerns and the great importance of achieving sustainable economic growth underscore the urgent need to transition to a green energy system as soon as possible. To shed light on the relationship between the economy and renewable energy, this study assesses the nonlinear relationship between renewable energy consumption and economic growth for 24 OECD countries between 1990 and 2015.Design/methodology/approachThe authors apply two nonlinear models: panel threshold regression (PTR) and panel smooth transition regression (PSTR).FindingsThe results show that the positive effect of renewable energy consumption on economic growth is conditional. On the one hand, the results of the nonlinear PTR model yielded a threshold value for renewable energy consumption of about 251.17. Below this threshold, the authors find a negative impact of renewable energy consumption on economic growth. However, above this threshold, renewable energy consumption becomes a favorable source of economic growth. Using the nonlinear PSTR model based on the gamma transition parameter of 2.014, the transition from low renewable energy consumption regime to higher is abrupt.Originality/valueReferring to previous studies analyzing linear causality between renewable energy and economic growth, most of the results show various mixed and non-stable effects over the study period. The contributions of this study consist in conduct a series of empirical tests of the nonlinear effects of renewable energy use on economic growth using two nonlinear approaches such as the PTR and PSTR models. If the authors show that such a relationship is nonlinear, it is essential to check whether the transition from one weak regime to another strong regime is abrupt or smooth, using the PSTR approach.

A significant obstacle to the scaling of renewable energy is the concern that increased consumption of renewable energy could have a negative impact on economic growth, due to the higher cost of renewable energy compared to fossil energy. To examine how exactly renewable energy consumption impacts economic growth, this study uses a non-linear panel threshold model with trade openness, financial development, and per capita income as threshold variables, to analyze the long-term non-linear relationship between renewable energy consumption and economic growth in 28 European Union countries from 2007 to 2017. The results show that (i) renewable energy consumption has significant threshold effect on economic growth. First, the effect of renewable energy consumption on economic growth is positive and significant if and only if it surpasses a certain threshold of trade openness. Second, a moderate financial development interval makes the consumption of renewable energy have a positive effect on economic growth, and if it is too low or too high, it will have a negative effect. Third, as for income level, the promoting effect of renewable energy consumption on economic growth is showing a "stepwise growth" feature, which means, when the income level surpasses its threshold value, the positive effect is strengthened. (ii) The results of the fixed-effects model show that, overall, renewable energy consumption promotes economic growth. (iii) The changes in the number of countries in different threshold intervals indicate that the positive impact of renewable energy consumption on economic growth in the EU is increasing.

This paper aims to systematically explore the impact of renewable energy consumption, trade openness, industrialization, and urbanization on economic growth and carbon emissions while considering the different development levels of 122 countries over the period 1998–2018. Pesaran CD test, CIPS unit root test, Pedroni cointegration test, fully modified ordinary least square (FMOLS) estimation, Dumitreschu–Hurlin causality test and DOLS robustness test are adopted. The results show that trade openness has different effects on economic growth and carbon emissions across different income groups. Specifically, the impact of trade openness on economic growth in high- and low-income countries is positive, while trade openness has a negative impact on economic growth in middle-income countries. Meanwhile, the impact of trade openness on carbon emissions supports the pollution haven hypothesis. Urbanization promotes economic growth in all income countries, and increases carbon emissions in countries of all income groups except high-income countries. Renewable energy consumption promotes economic growth and curbs carbon emissions, while industrialization increases economic growth and carbon emissions. Further findings show a one-way causality from trade openness to renewable energy consumption. Finally, some targeted recommendations are provided for countries with different development stages.

This study examines the relationship between renewable energy consumption, trade openness and agricultural productivity in Africa. Specifically, the study examines the intensity of the type of renewable energy consumed in Africa; investigates the effect of renewable energy consumption on agricultural productivity in Africa and analyse the effect of trade openness on agricultural productivity via the consumption of renewable energy in Africa. In achieving this, the System Generalized Methods of Moments (SYSGMM) estimation technique is employed while also checking the robustness of the result using the cross section augmented distributed lag model estimation technique. The result from the study shows that hydro and low carbon type of renewable energy accounts for over 90% of the renewable energy consumed in Africa between 2000 and 2020. Also, the result from the study shows that there is a positive and significant impact of renewable energy consumption on agricultural productivity in Africa. Trade openness and agricultural productivity have a positive relationship as trade openness facilitates the importation of machines that uses renewable energy in the agricultural value chain system. Thus, encouraging policy actions and the intensification of the use of renewable energy improves agricultural productivity in Africa. At regional level and in the long run, renewable energy consumption has a positive and significant effect on agricultural productivity only in Central and Southern region of Africa. Also, at the regional level, trade globalization has a positive and significant impact on agricultural productivity by enhancing the deployment of machines that uses renewable energy in the agricultural productivity in Central and Southern regions of Africa in the long run, and in the Eastern and Western regions of Africa in the short run. The use of renewable energy in the agricultural value-added space requires the deployment of new and innovative equipment which are mostly imported into Africa just like the processing and irrigation equipment; and these guarantees increase in agricultural productivity and efficiency. There is the need for respective governments of African economies and international development partners to provide finance for farmers which encouragesimportation of renewable energy enabled agricultural machineries used for processing, irrigation, packaging, refrigerating, transport system, storage, and handling value chains to guarantee improved agricultural productivity. Keywords: Agricultural Productivity; Renewable Energy Consumption; Trade Openness.

The long run trade orientation of an economy is measured in this article by an index which measures the extent to which the real exchange rate is distorted away from its free trade level by the trade regime. The technique for estimating a cross country index of real exchange rate distortion uses the international comparison of prices prepared by Robert Summers and Alan Heston. Resource endowment constitutes the norm and real overvaluation or undervaluation relative to this norm reveals whether incentives are directed to the domestic or international market. The index is constructed based on data for GDP/capita average price level in US dollars 1976-85 and GDP growth rate/capita 1976-85. Other sections are devoted the comparison of the procedure for 117 countries between 1976-85 and an examination of the empirical relationship between outward orientation and economic growth and sensitivity analysis. The results indicate that Latin America generally was overvalued by 33% relative to Asia and Africa was overvalued by 86%. The real exchange rate distortion index supports the view that Asian countries are more outward oriented. Asian economies have lower price levels which reflect relatively modest protection and incentives oriented to external markets. Latin American countries with moderately high price level and African countries with very high price levels reflect strong protection and incentives directed to production for the domestic market. An alternative specification which eliminates the dummy variables for Africa yields similar results with slightly lower magnitude; i.e. overvaluation is 60% instead of 86% for Africa and Latin America is overvalued by 39% instead of 33% over Asia. A table is provided which indicates by country the distortion and variability of the real exchange rate the GDP growth the 1976 GDP/capita and the investment rate. Another finding was that there is a significant negative relationship between distortion of the real exchange rate and growth of GDP/capita after controlling for the effects of real exchange rate variability and investment level with both the original specification and the alternative. The growth rate/capita of Latin American and African countries would increase 1.5-2.1% with a shift to move outward oriented trade policies. This gain as well as devaluation of the real exchange reate trade liberalization and maintenance of a stable real exchange rate would contribute to positive growth rates. In the analysis of the poorest 24 countries the result was that only rate distortion and not variability and investment rate explained the growth rate. The gain for Ghana for example of adopting the trade policies and exchange rate of Bangladesh would be 5% to its growth.

With the passage of time, the continued burning of fossil fuels is proving to be one of the world's most serious issues. In response, the current research aims to assess the critical linkage between carbon emissions and renewable energy, trade openness, and economic growth in Sweden utilizing a dataset from 1965 to 2019. The study applied the novel quantile-on-quantile regression (QQ) approach to assess this relationship. The main objectives are to address the following questions: (i) What are the effects of trade openness on CO2 emissions in each quantile? (ii) Does renewable energy consumption mitigates CO2 emissions in each quantile? What is the impact of economic growth on CO2 emissions in each quantile? The outcomes from the QQ approach revealed that at low and medium quantiles (0.1-0.6), the effect of trade openness on CO2 emissions is negative. Furthermore, at lower and higher quantiles (0.1-0.90) of combination of renewable energy consumption and CO2 emissions, the effect of renewable energy consumption on CO2 emissions is negative. Finally, at majority of the quantiles, the effect of economic growth on CO2 emissions is negative. Moreover, the present study applied the quantile regression (QR) approach as a robustness check. The findings of the QR validate the findings of the QQR approach. The study proposes that policy-makers in Sweden should place greater emphasis on raising public awareness regarding the issues of renewable energy since it mitigates environmental degradation.

The majority of studies analyzed show a positive and statistically significant impact of renewable energy consumption on economic growth. Nevertheless, some studies suggest a limited effect, while others find no statistically significant effect. Faced with this problem, we conducted a study aimed at analyzing the impact of renewable energy consumption on economic growth in the Kingdom of Saudi Arabia for the period 1990–2020. To determine the integration properties of the variables, we utilized the sharp and smooth structural breaks unit root test developed by Shahbaz, Omay and Roubaud (SOR). We also used the bootstrap approach of testing ARDL limits to examine the cointegration between variables. Using the VECM model, we studied the causal relationship between economic growth and its determinants. The results show, in the short and long run, the existence of a bidirectional causality between renewable energy consumption and economic growth (Feedback Hypothesis). Thus, there is a bidirectional relationship between GDP and capital and also between GDP and labor, in the long run. Therefore, an important policy implication resulting from this analysis is that renewable energy can be considered as an important factor for sustainable economic development in Saudi Arabia. The findings for Saudi Arabia may also be relevant for oil exporting countries to achieve efficiency and promote the renewable energy sector beyond oil.

Nonrenewable energy makes up a sizeable portion of Africa’s gross domestic product. The continent heavily relies on nonrenewable energy sources, such as gasoline, for industrial and commercial uses, which helps it expand and develop, especially in oil-producing nations. Incorporating nonrenewable energies when analyzing the relative effects of renewable energy consumption and economic growth on environmental quality is paramount. The transition to renewable energy has been identified as a contributing factor in clean energy and sustainable development, but the consumption of renewable energy in Africa is negligible. This study employed panel threshold regression and covered data from 1990 to 2019, and examined the non-linear relationship between renewable energy consumption, economic growth, and environmental quality. According to the study’s findings, the consumption of renewable energy has a nonlinearly negative relationship with carbon emission proxied environmental quality. The relationship between environmental quality and economic growth was also shown to be nonlinearly positive, pointing to the dominance of nonrenewable resources in the African industry. The report recommends an effective policy for boosting the use of renewable energy sources in order to support clean energy and sustainable development.

China's efforts in promoting renewable energy are recognized as a strategy for mitigating its carbon footprint. This paper focuses on power system and utilizes provincial panel data in China to examine the relationship between renewable energy consumption and carbon emission. Firstly, descriptive analysis of important variable data is carried out to establish the basis for regression analysis. Secondly, sample data from 30 provinces in China is used to conduct empirical test based on the time span from 2014 to 2019. Finally, the findings demonstrate that the implementation of renewable energy can effectively diminish both overall and regional carbon emission and also indicate that factors such as trade openness and economic growth also exert an influence on carbon emission.

PurposeThe primary objective of this research is to assess the influence of financial development, institutional quality and renewable energy consumption on India’s carbon emissions.Design/methodology/approachThis study utilises econometric methodologies, specifically the autoregressive distributed lag (ARDL) model and Toda–Yamamoto causality tests, to explore the interplay among renewable and non-renewable energy consumption, financial development, economic growth, institutional quality, trade openness and carbon emissions in India spanning the years 1996–2019.FindingsThe research indicates that in India, greater utilisation of renewable energy, enhanced financial development and improved institutional quality are linked to lower carbon emissions. On the contrary, an escalation in carbon emissions is related to the consumption of non-renewable energy and greater trade openness. The Toda–Yamamoto causality tests reveal one-way causal relationships from institutional quality, financial development, non-renewable energy consumption and economic growth to CO2 emissions. Furthermore, the study identifies reciprocal causation, demonstrating that carbon dioxide emissions influence renewable energy consumption and trade openness.Research limitations/implicationsThis study recommends that forthcoming research expand its focus by integrating more comprehensive indicators such as consumption, production, transport-based CO2 emissions or ecological footprint. Additionally, to bolster the rigour of future inquiries, researchers might consider exploring alternative regression analysis methods like NARDL and STAR.Originality/valueThis study addresses a significant gap in the existing literature by being the first empirical investigation into the effects of renewable energy consumption, institutional quality and financial development on carbon emissions in the Indian economy. Unlike prior research, we consider a comprehensive financial development and institutional quality index, providing a more holistic perspective. This unique approach contributes valuable insights into the environmental challenges faced by the Indian economy, offering a nuanced understanding of the complex dynamics of environmental degradation in this region.

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Do energy security and environmental quality contribute to renewable energy? The role of trade openness and energy use in North African countries

This study aims to investigate the impact of renewable energy consumption, carbon dioxide emissions, and globalization on economic growth in BRICS countries (Brazil, Russia, India, China, and South Africa). The data used are gross domestic product, renewable energy consumption, carbon dioxide emissions, and the KOF globalization index from 1990 to 2022, obtained from the World Bank, the Energy Institute, the European Commission, and ETH Zurich. The data were analyzed using multiple regression of panel data with a fixed-effect model. The results of the study show that renewable energy consumption, carbon dioxide emissions, and globalization simultaneously have an effect on GDP. Partially, renewable energy consumption and globalization have a significant positive effect on GDP, while carbon dioxide emissions have a significant negative effect on GDP in BRICS countries.