Effect of Economic Indicators, Renewable Energy Consumption and Human Development on Climate Change: An Empirical Analysis Based on Panel Data of Selected Countries

Yuanyuan Hao

doi:10.3389/fenrg.2022.841497

Abstract

Global warming is mainly influenced by factors such as energy consumption, human development, and economic activities, but there is no consensus among researchers and there is relatively little research literature on less developed countries. Therefore, this study attempts to explore the impact of renewable energy consumption, human development and economic growth on climate change from a macroeconomic perspective for 105 countries worldwide over the period 1990–2019 by constructing a panel vector autoregressive (PVAR) model and using generalized method of moments (GMM) and panel impulse response analysis. The analysis includes four panels of high-income, upper-middle-income, lower-middle-income, and low-income countries. The results of the study find that economic growth, FDI, trade openness, industrialization, renewable energy consumption and HDI have different impacts on climate change (CO2 emissions) in different regions during the sample period. Specifically, in the four panels, economic growth, industrialization, FDI, and trade openness all play a varied role in aggravating environmental pollution (CO2 emissions). In high-income and upper-middle-income countries, industrialization has a positive effect on CO2 emissions, while FDI has a negative impact, which supports the pollution halo hypothesis. However, both have a positive impact on CO2 emissions in lower-middle-income and low-income countries. The results also found that except for upper-middle-income countries, trade openness and renewable energy consumption help reduce CO2 emissions, while renewable energy consumption has little effect on suppressing CO2 emissions in low-income countries. In addition, HDI has promoted CO2 emissions in upper-middle-income and lower-middle-income countries, but has curbed CO2 emissions in high-income countries. Therefore, under the premise of not affecting economic growth and HDI, those empirical results will not only help decision-makers formulate appropriate renewable energy policies, but also are of great significance to the realization of a healthy and sustainable global environment.

Highlights

In recent years, on the issue of global warming, energy, environmental and social science researchers have increasingly discussed the challenging significance of economic globalization and climate change for the realization of human development, economic growth and environmental sustainability (Kirikkaleli and Adebayo, 2021)
Since the panel data used has the nature of time series, in order to avoid the problem of spurious regression caused by nonstationary, before using the Panel vector autoregressive model (VAR) model to measure the dynamic interaction effects between economic indicators, renewable energy, human development and climate change, the unit root test is an inevitable preliminary verification method
The impulse response function shows that a standard deviation impact of economic growth and industrialization has a positive impact on CO2 emissions, which will first rise and fall, and reach the maximum value in the second year, with the impacts being 0.007 and 0.003, respectively

Summary

Introduction

On the issue of global warming, energy, environmental and social science researchers have increasingly discussed the challenging significance of economic globalization and climate change for the realization of human development, economic growth and environmental sustainability (Kirikkaleli and Adebayo, 2021). According to the 2020 Emission Gap Report issued by the United Nations Environment Programme, COVID-19 has reduced CO2 emissions in 2020, the concentration of main greenhouse gases (CO2, methane) and nitrous oxide produced in the atmosphere in 2019 and 2020 has continued to rise, causing the global temperature to increase by more than 3°C degrees. Even if we have fulfilled the goal of the Paris Agreement, which is to control the rise of global temperature below 2°C in 21st century and strive to achieve the target of 1.5°C in temperature control, the impact of climate change will still intensify and cause the most severe damage to the most vulnerable countries and communities (Rogelj et al, 2016). In order to achieve the Paris Agreement target and the long-term energy and environmentally sustainable development goals, clean and sustainable green renewable energy must be used in life, production and consumption as part of the global response to climate change

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Conclusion