Determinants of consumption-based carbon emissions in Chile: anapplication of non-linear ARDL.

Tomiwa Sunday Adebayo,Dervis Kirikkaleli,Zahoor Ahmed,Edmund Ntom Udemba

doi:10.1007/s11356-021-13830-9

Abstract

In recent years, a growing number of scholars have employed various proxies of environmental degradation to understand the reasons behind rising environmental degradation. However, very few studies have considered consumption-based carbon emissions, even though a clear understanding of the impact of consumption patterns is essential for redirecting the pattern to more sustainable consumption. Thus, this study takes a step forward by using consumption-based carbon emissions (CCO2) as a proxy of environmental degradation using the novel non-linear ARDL technique for Chilefrom 1990 to 2018. To the best understanding of the investigators, no prior studies have investigated the drivers of consumption-based carbon emissions utilizing non-linear ARDL. The study employed ADF and KSS (non-linear) tests to check the data series’ stationary level. Additionally, the symmetric and asymmetric ARDL approaches are utilized to explore cointegration and long-run linkages. According to the results, there is no symmetric cointegration among the variables; however, the empirical estimates reveal a long-run asymmetric connection between the indicators and CCO2 emissions. The novel results from the asymmetric ARDL indicate that negative and positive changes in economic growth deteriorate the quality of the environment. Interestingly, a reduction in economic growth makes a more dominant contribution to environmental degradation. Moreover, positive changes in renewable energy usage improve the quality of Chile’s environment, inferring that the country can achieve a reduction in environmental degradation by boosting renewable energy consumption. Surprisingly, the study found that technological innovation is ineffective in reducing consumption-based carbon emissions, which implies that Chile’s technological innovation is not directed towards manufacturing green technology. Finally, the policy implications are discussed with respect to reducing consumption-based carbon emissions.

Highlights

Climate change is a worldwide concern that requires even more focus than Covid-19
The findings show that both economic growth and renewable energy usage have long-run asymmetries, while technological innovation does not have long-run asymmetries
Utilizing Chile, the 5th biggest economy in Latin America, as a case study, the current study examines whether consumption-based carbon emissions (CCO2) are nonlinearly influenced by renewable energy usage (REN), technological innovation (TI), and economic growth (GDP) using data from the period from 1990 to 2018

Summary

Introduction

Climate change is a worldwide concern that requires even more focus than Covid-19. This impacts the whole Earth negatively with multifaceted problems such as global warming, melting of Antarctica and rising sea levels, reduction in the availability of water and upsurge in disease, and the extinction of wild and aquatic creatures (Akinsola and Responsible Editor: Ilhan OzturkEnviron Sci Pollut Res (2021) 28:43908–43922Adebayo 2021; Wang et al 2021b). Following the ratification of the Paris Agreement by many countries, including Chile, which is premised on maintaining the temperature level of 2 °C above preindustrial level and 1.5 °C, the individual countries (developed and developing) need to work towards the stipulated target (Umar et al 2020; Alola and Kirikkaleli 2020; Adebayo and Kirikkaleli 2021). One of the Paris Agreement targets, as specified under Articles 2 and 7, is to encourage the capacity to adapt to the negative impacts of climate change, boost climate resilience, and lower the level of greenhouse gas (GHG) emissions. In this regard, Chile is one of the countries identified as being a signatory of the Paris Agreement. The transition from the agricultural age to the industrialization age has paved the way for excessive utilization of fossil fuels, which lead to the pollution of earth bodies (air, land, and water bodies) that constitute the environment

Objectives

Methods

Findings

Discussion

Conclusion