Environmental implication of offshore economic activities in Indonesia: a dual analyses of cointegration and causality.

The problem of climate change, which causes various negativities in the global sense, is one of the important research topics. It is necessary to determine the factors affecting carbon dioxide (CO2) emissions, which are the main determinants of climate change, and to take measures for this. In this study, based on the hypothesis that economic growth, energy usage, trade openness, and foreign direct investment affect CO2 emissions, it was aimed to examine the effects of economic growth, energy usage, trade openness, and foreign direct investment on CO2 emissions for G8 countries using annual data for the period 1990-2018. For this purpose, first, a literature review was done in the study. Then, cross-section dependency and heterogeneity tests were performed as empirical analyses. Afterward, unit root tests, cointegration analyses, and causality analyses were performed in the study. Finally, in the study, short-term parameters and long-term parameters were estimated to capture possible dynamic relationships between variables. The Westerlund Error Correction Model (ECM) panel test for cointegration showed that there is a cointegration relationship between these variables for both the entire panel and the cross-section units. The results of the Augmented Mean Group (AMG) estimator method showed that (i) economic growth has no effect on CO2 emissions in 7 of 8 countries, (ii) energy usage increases CO2 emissions in 4 of the countries studied but decreases it in one of them, and (iii) foreign direct investments and trade openness do not affect CO2 emissions in 4 countries but positively affects in 2 countries and negatively in 2 countries. According to the results obtained from the Pooled Mean Group (PMG) analysis, while economic growth, energy usage, and trade openness affect CO2 emissions in the long run, economic growth, energy use, and trade openness affect CO2 emissions in the short run too. According to Dumitrescu-Hurlin panel causality results, it was seen that there is no causal relationship between CO2 emissions, economic growth, and energy use. While there is a unidirectional causality from CO2 emissions to foreign direct investments, it was determined that there is a bidirectional causality between trade openness and CO2 emissions. When the results were examined in general, it was understood that the variables of economic growth, trade openness, foreign direct investment, and energy usage are effective on CO2 emissions in the G8 countries. It would be beneficial for countries to include the objectives of making production with clean production technologies, ensuring efficient use of energy, and expanding the use of renewable energies among their main targets.

South Korea is considered one of the leading countries in innovation and research and development (R&D), in particular in renewable energy R&D efforts, but it is also one of the more polluting countries. So, understanding the interplay between these variables is of great interest. The main objective of this article is to examine the relationship between carbon dioxide (CO2) emissions, economic growth (GDP), renewable energy consumption (RE), foreign direct investment (FDI), home patents (HP), and foreign patents (FP) in South Korea using data ranging from 1980 to 2018. For this purpose, the autoregressive distributed lag (ARDL) approach and Granger causality tests were employed. Estimates of long-run elasticity point to a positive relationship between GDP and CO2 emissions. FP and RE have a negative influence on CO2 emissions but they have a favorable effect on GDP. FDI and HP have positive impacts on CO2 emissions. Granger causality outcomes demonstrate that CO2 emissions, GDP, RE, and FP have long-term bidirectional causal relationships. In the short-run, there are unidirectional causalities running from FP and FDI to RE and from FDI and HP to GDP. Besides, there is a bidirectional causality between GDP and RE. South Korea should continue to promote renewable energies and facilitate the use of foreign patents, particularly those relating to renewable energies. This will lead to a reduction in its carbon emissions while benefiting its economic growth.

The concern for environmental sustainability comes along with sustainable energy for consumption. Therefore, this study aims to explore the direct and indirect effects of renewable energy on economic growth and carbon emissions by employing Partial Least Square Structure Equation Modeling and Granger Causality Test and the data for this study is from 1990 to 2021. The results from the Partial Least Squares Structure Equation Modeling indicate that renewable energy consumption causes carbon emissions and has no effect on economic growth. Financial inclusion and foreign direct investment have positive effects on carbon emissions. However, renewable energy has an indirect negative effect on carbon emissions through economic growth. Foreign direct investment affects economic growth positively. Furthermore, the results from the Granger causality test indicate that renewable energy has a unidirectional causality relationship with financial inclusion and foreign direct investment and has a feedback causality relationship with economic growth. In addition, there is a feedback causal effect between financial inclusion and carbon emissions, a unidirectional effect running from carbon emissions to foreign direct investment, and a causal effect from economic growth to foreign direct investment. This study has suggested comprehensive policy recommendations for policymakers based on the findings.

This study aims to evaluate the impact of inward foreign direct investment (FDI) and economic growth on carbon emissions in South Korea, a nation committed to achieving carbon neutrality by 2050. Given the dual role of inward FDI and economic growth in fostering economic development and potentially increasing carbon emissions, this study explored the complex relationships among these variables. This study uses annual time-series data from 1990 to 2021, including carbon emissions (CO₂) as the dependent variable and GDP, inward FDI, and renewable energy consumption as explanatory variables. An autoregressive distributed lag (ARDL) bounds test was employed to assess the long-term relationships between these variables. The empirical analysis confirms the long-run relationship among FDI, economic growth, renewable energy use, and carbon emissions in South Korea. This finding underscores the necessity of integrating sustainable investment practices and renewable energy solutions to mitigate the environmental impact of economic growth and FDI. Unlike previous studies, this study uniquely combines the effects of FDI, GDP, and renewable energy on carbon emissions within the context of South Korea’s ambitious carbon neutrality commitment by 2050. Applying a robust ARDL model provides nuanced insights into the interactions between economic factors and sustainability efforts, offering actionable data to policymakers aiming to balance economic and environmental goals. These results highlight the importance of sustainable policies that balance economic growth and environmental preservation, especially in the context of South Korea’s carbon neutrality goals.

PurposeThe purpose of this paper is to analyze the long-run as well as short-run nonlinear effect of foreign direct investment (FDI), economic growth (EG) and industrialization on environmental degradation (carbon dioxide (CO2) emissions) in Pakistan.Design/methodology/approachThe study applies a nonlinear autoregressive distributive lag methodology to examine the long-run and short-run relationship among the variables. FDI, EG and industrialization are decomposed into positive and negative variations to examine the nonlinear relationship with CO2emissions. Granger causality test is used to examine the direction of causality among the variables. The study uses annual time-series data of Pakistan from 1975 to 2016.FindingsAn increase in FDI has a positive and significant effect on CO2emissions in the long run, while a decrease in FDI has a negative and insignificant effect on CO2emissions. An increase in EG has a positive and significant effect, while a decrease in EG has a negative and insignificant effect on CO2emissions in the long run. An increase in industrialization has a positive and significant effect on CO2emissions, while a decrease in industrialization has a negative and insignificant effect on CO2emissions. Unidirectional causality flows from CO2emissions to a positive partial sum of FDI, EG, industrialization and a negative partial sum of EG in the short run.Practical implicationsThe government has to establish the environmental regulation for industrial sectors. Research and development centers are required at government and private levels to control pollution through new technologies. Regulations and restrictions are required on the foreign investor to adopt friendly environmental policies.Originality/valueThis study contributes to the existing literature by analyzing the nonlinear effects of FDI, industrialization and EG on environmental pollution in Pakistan. The main significance of this investigation is to provide the essential evidence, information and better understanding to key stakeholders of the environment.

Summary Cities, contributing more than 75% of global carbon emissions, are at the heart of climate change mitigation. Given cities' heterogeneity, they need specific low-carbon roadmaps instead of one-size-fits-all approaches. Here, we present the most detailed and up-to-date accounts of CO2 emissions for 294 cities in China and examine the extent to which their economic growth was decoupled from emissions. Results show that from 2005 to 2015, only 11% of cities exhibited strong decoupling, whereas 65.6% showed weak decoupling, and 23.4% showed no decoupling. We attribute the economic-emission decoupling in cities to several socioeconomic factors (i.e., structure and size of the economy, emission intensity, and population size) and find that the decline in emission intensity via improvement in production and carbon efficiency (e.g., decarbonizing the energy mix via building a renewable energy system) is the most important one. The experience and status quo of carbon emissions and emission-GDP (gross domestic product) decoupling in Chinese cities may have implications for other developing economies to design low-carbon development pathways.

This study explores the dynamic relationship between carbon emissions and economic growth in Sierra Leone—a developing West African country striving to balance development and environmental sustainability. The analysis incorporates foreign direct investment (FDI), energy consumption (EC), and trade openness (TO) as key explanatory variables, reflecting the country’s resource-dependent economy. Using the Autoregressive Distributed Lag (ARDL) model and time-series data from 1980 to 2021, the study examines both short- and long-term relationships. Stationarity of variables is confirmed via the Augmented Dickey-Fuller test, validating the model's reliability. Findings reveal a long-run co-integrating relationship among CO₂ emissions, economic growth, FDI, EC, and TO. Granger causality tests indicate a unidirectional causality from FDI to CO₂ emissions, suggesting that foreign investment—especially in energy-intensive sectors—plays a pivotal role in shaping environmental outcomes. Variance decomposition further shows that energy consumption is the most significant driver of emissions, followed by economic growth, with trade openness having a moderate effect. Policy recommendations emphasize aligning FDI with green practices, promoting low-carbon technologies, and transitioning to renewable energy sources like solar, hydro, and wind. Strengthening environmental regulations and offering incentives for sustainable business practices are also advised. This research provides critical insights for policymakers to pursue strategies that foster economic growth while minimizing environmental degradation.

The increase in world carbon emissions is always in line with national economic growth programs, which create negative environmental externalities. To understand the effectiveness of related factors in mitigating CO2 emissions, this study investigates the intricate relationship among macro-pillars such as economic growth, foreign investment, trade and finance, energy, and renewable energy with CO2 emissions of the high gross domestic product economies in East Asia Pacific, such as China, Japan, Korea, Australia and Indonesia (EAP-5). Through the application of the Vector Error Correction Model (VECM), this research reveals the long-term equilibrium and short-term dynamics between CO2 emissions and selected factors from 1991 to 2020. The long-term cointegration vector test results show that economic growth and foreign investment contribute to carbon reduction. Meanwhile, the short-term Granger causality test shows that economic growth has a two-way causality towards carbon emissions, while energy consumption and renewable energy consumption have a one-way causality towards carbon emissions. In contrast, the variables trade, foreign direct investment, and domestic credit to the private sector do not have two-way causality towards CO2 emissions. The findings reveal that economic growth and foreign investment play significant roles in carbon reduction, which are observed in long-term causality relationships, while energy consumption and renewable energy are notable factors. Thus, the study offers implications for mitigating environmental concerns on national economic growth agendas by scrutinizing and examining the efficacy of related factors.

The impact of energy consumption, income and foreign direct investment on carbon dioxide emissions in Vietnam

The dependence of oil production in the Gulf Cooperation Council (GCC) region may have environmental consequences. This research explores the nonlinear effects of oil rents and the economic growth of six GCC countries on their per capita CO2, CH4, N2O, and Greenhouse Gas (GHG) emissions, considering spatial linkages through 1980–2014. We apply fixed effects (FE) and corroborate the spatial dependency in all estimated pollution models. Spatial Durbin model (SDM) is utilized to estimate the direct and spillover effects. We find the inverted U-shaped relationship of economic growth with CO2, CH4, N2O and GHG emissions, and of oil rents with CH4 and GHG emissions. Monotonic positive effects of oil rents on CO2 emissions and U-shaped relationship between oil rents and N2O emissions are also found. Urbanization has positive effect on the CO2, CH4 and GHG emissions and has negative effect on N2O emissions. Financial market development (FMD) has negative effects on all types of investigated emissions. Foreign direct investment (FDI) has negative effects on CO2 and N2O emissions. Energy use has positive effects on CO2 and N2O emissions. Further, the neighboring spillover effects of economic growth, oil rents, urbanization, FDI, energy use and FMD are found statistically significant for some investigated emissions. Hence, oil rents, energy use, urbanization and economic growth are responsible for environmental degradation of home and neighboring countries in the GCC region, and we recommend implementing tighter laws to protect the environment.

PurposeThe persistent rise in the global discharges of carbon (CO2) emissions and the likely undesirable consequences of this practice on the global atmosphere attracts the attention of policy makers and researchers to argue on the causes and perpetrators of CO2 emissions at international level. The purpose of this paper is to examine the relationship between economic growth, energy production, capital formation, foreign direct investment (FDI) and CO2 emissions in the LMI and Middle East and North African (MENA) countries for the period 1980–2011.Design/methodology/approachTwo separate autoregressive distributed lag (ARDL) models were estimated for both the LMI and MENA countries, for the period 1980–2011. Furthermore, a fully modified OLS (FMOLS) was estimated for the two regions over the same period.FindingsThe results indicated that for the lower-middle income countries, there is a positive significant relationship between energy production and CO2 emissions. In the long run while in the short run, FDI and EGP are positively related to CO2 emissions while gross capital formation (GCF) has a negative impact on the CO2 emissions in the short run over the same period. Similarly, for the MENA countries, there is a positive relationship between EGP, GCF and CO2 emissions in both the short run and the long run. Furthermore, the estimated group mean FMOLS indicated that apart from GDP, all other variables have significant positive impact on CO2 emissions.Research limitations/implicationsThe study covers only the period 1980–2011. This was because of limited available data during the study.Practical implicationsThe study recommended the adoption of green technology by FDI firms and also in the process of energy production such as in crude oil production.Originality/valueThe study carried out a complex analysis where simultaneously all the countries of LMI and MENA regions where considered. Furthermore, separate analysis where conducted for each of the LMI and MENA regions using ARDL model. Variable representing energy production was included in the analysis which was not considered by previous studies. Lastly, FMOLS was estimated for the pooled of LMI and MENA countries which further distinguished the study from the relevant previous studies.

As a model for energy transition to low-carbon economy, Denmark is of great importance for studying internal relationships between economic growth, both energy consumption and production, and Carbon emissions. Based on Denmark’s data for the total consumption of petroleum oil and gas resources, total production of oil and gas resources, gross domestic product(constant 2010 US$) and CO2 emissions over the time span 1984-2016, Johansen test shows that there is no cointegration relationship between CO2 emissions and oil and gas consumption, and the autoregressive distributed lag (ARDL) boundary cointegration test shows that there is no cointegration relationship between CO2 emissions and economic growth. Nevertheless, ARDL boundary cointegration test is used to confirm the existence of cointegration between economic growth and both the energy production and consumption. We then establish an error correction model to analyze the short-term relationship between these two cointegrated metrics. The Granger causality test indicates that there is one-way causality between economic growth and energy consumption and energy production; in particular, economic changes help explain changes of energy consumption and production in the future. Finally, the empirical analysis results are further discussed with consideration of Denmark’s energy policies and the current state of its energy economy. The results of the present study can help the other countries in the design of energy development, the clean and low carbon energy transition policies for sustainable and long-term economic development.

According to the Carbon Brief Profile report by Timperley (2019), India has been identified as the world's 3rd largest emitter of greenhouse gases (GHGs) after China and the USA. Following the Paris Agreement and India's pledge as among the stakeholders at the global climate talks and how fast India ratified the Paris Agreement within a year on the 2nd of October 2016, it is essential to investigate the country's (India) commitment in reducing its emission towards enhancing a positive environmental performance. Both structural breaks, linear autoregressive distributed lag (ARDL) and nonlinear autoregressive distributed lag (NARDL), were selected simultaneously for this study, but at a later stage, after being bound to cointegration estimation, the NARDL was dropped because of its inability to sustain the claim of cointegration in the analysis. The rest of the analyses were based on liner ARDL model (short-run and long-run) with diagnostic tests, Granger causality estimation. Ecological Footprint (EFP) was chosen as an indicator to environment because of its richness in measuring the environmental performance. The linear (ARDL) output affirms a positive and significant link among ecological footprint and agriculture, energy use, and population with a negative link between ecological footprint (EFP) and foreign direct investment (FDI). The Granger causality test indicates a one-way transmission passing from agriculture, foreign direct investment, energy use, and population to ecological footprint. Also, a one-way transmission was found passing to economic growth (GDP) from foreign direct investment (FDI) and feedback transmission was found between FDI and energy use. This finding has an implication to both economic and environmental performances; hence, the policy framework should be targeting the enhancement of economy via the foreign direct investment and agriculture with a focus on energy use and environmental performance.

A nation's economic growth is influenced by several factors, such as natural resources, human capital, technology, and social and political conditions. The interactions among these factors are often complex and not well understood. This study examines the relationship between renewable energy, economic growth, and human capital in Saudi Arabia from 1990 to 2019. Using the Autoregressive Distributed Lag (ARDL) model and Granger causality tests, the research investigates both short-term and long-term connections among these variables. Energy consumption and foreign direct investment (FDI) are included as control variables. The ARDL bounds test confirms a long-term relationship among renewable energy use, economic growth, and human capital. The results show that human capital and FDI have a negative effect on gross domestic product (GDP), suggesting that GDP growth in Saudi Arabia is not closely linked to FDI inflows. In contrast, economic growth positively affects energy consumption. Granger causality tests reveal a one-way short-term causal relationship from FDI and energy use to GDP, and from the Human Capital Index to energy use. A two-way causal relationship is also found between GDP and the Human Capital Index, indicating mutual influence. This study provides new insights into Saudi Arabia’s economic transition by connecting traditional growth factors with sustainable development. The findings can help guide policy decisions aimed at promoting long-term growth while supporting environmental sustainability.

At the present time, information and communication technology (ICT) has played a vital role in socio-economic development such as economic growth, literacy, life expectancy, and employment levels in societies, however, such development has come with various environmental damages perspectives. This study scrutinizes the impact of ICT, economic growth, and foreign direct investment (FDI) on carbon dioxide (CO2) emissions in the 44 One Belt and Road Initiative (OBRI) countries split into sub-region from 1991 to 2019. This study applied various econometrics approaches such as cross-sectional dependence, second-generation unit root, and Westerlund panel cointegration techniques are executed to analyze the panel data set. The full modified ordinary lease square and dynamic ordinary lease square estimators are applied to investigate the long-term influence of ICT development, GDP (economic growth), and FDI on CO2 emissions. The empirical analysis was performed at a disaggregated level to assess the possible environmental influences across the OBRI countries. Overall, the results reported that broadband and mobile development have an adverse effect on CO2 emissions. The finding further reveals that the broadband indicator negatively affects CO2 emissions in all OBRI regions except South Asia. Similarly, the mobile use indicator protects the environmental quality in all OBRI regions except MENA (Middle East and North Africa) and Central Asia. Regarding country-wise analysis, broadband has alleviated the pollution level in 21 countries, while mobile has alleviated it in 15 countries. Moreover, economic growth is responsible to increase pollution levels in all panels and regions except Europe. Besides, the results highlight that higher FDI reduces environmental pollution whereby, the pollution halo hypothesis is supported to hold for all OBRI panels and regions except MENA countries. Based on the empirical findings, the policymakers and governments of these economies should design policies to grow smarter cities, transportation systems, electrical grids, industrial processes, and energy-saving production through ICT development on a macro level.