Financial development and carbon dioxide emissions in Nigeria: evidence from the ARDL bounds approach

The BRICS nations-Brazil, Russia, India, China, and South Africa-have grown significantly in importance over the past few decades, playing a vital role in the development and growth of the global economy. This expansion has not been without cost, either, since these countries' concern over environmental deterioration has risen sharply. Both researchers and decision-makers have focused a lot of attention on the connection between economic growth and ecological sustainability. By using nonlinear autoregressive distributed lag (NARDL) approach, the complex relationships were analyzed between important economic indicators-such as gross domestic product (GDP), ecological innovations (EI), energy consumption (ENC), institutional performance (IP), and trade openness (TOP)-and their effect on carbon emissions and nitrous oxide emissions in the BRICS countries from 1990 to 2021, this study seeks to contribute to this important dialog. Principal component analysis is formed for technological innovations and institutional performance using six (ICT service exports as a percentage of service exports, computer communications as a percentage of commercial service exports, fixed telephone subscriptions per 100 people, internet users as a percentage of the population, number of patent applications, and R&D expenditures as a percentage of GDP) and twelve (government stability, investment profile, socioeconomic conditions, internal conflict, external conflict, military in politics, control of corruption, religious tensions, ethnic tensions, law and order, bureaucracy quality, and democratic accountability) distinct indicators, respectively. The results of nonlinear autoregressive distributed lag estimation show that increase in economic growth would increase carbon dioxide and nitrous oxide emissions. The positive and negative shocks in trade openness have positive and significant impact on carbon dioxide and nitrous oxide emissions in BRICS countries. Furthermore, the positive shock energy consumptions have positive and significant effect on Brazil and India when carbon dioxide and nitrous oxide emissions are used. However, EKC exists in BRICS countries when carbon dioxide and nitrous oxide emissions are used. According to long-term estimation, energy consumption and technological innovations in the BRICS countries show a strong and adverse link with nitrous oxide and a favorable relationship with carbon dioxide emissions. In the long run, environmental indicators are seen to have a major and unfavorable impact in BRICS nations. Finally, it is proposed that BRICS nations can assure environmental sustainability if they support creative activities, enhance their institutions, and support free trade policies.

This study aims to investigate the effects of information and communication technology (ICT), energy consumption, economic growth, and financial development on carbon dioxide emissions using 1993–2013 panel data from 12 Asian countries. The study employs a panel unit root test accounting for the presence of cross-sectional dependence and found that Internet usage is stationary and carbon dioxide emissions, energy consumption, gross domestic production (GDP), and financial development are first-difference stationary. The results form Pedroni panel cointegration test confirms that the variables are cointegrated. The results of the cointegration test indicate that the ICT-energy-GDP-carbon dioxide emissions nexus has long-run equilibrium. Both energy consumption and GDP have significant, positive impacts on carbon dioxide emissions; energy consumption and GDP have an effect on carbon dioxide emissions growth. ICT has a significantly negative effect on carbon dioxide emissions; the promotion of ICT becomes one of the important strategies introduced to mitigate carbon dioxide emissions for various countries. Causality results show that energy consumption, GDP, and financial development cause more carbon dioxide emissions. Energy consumption, GDP, and carbon dioxide emissions cause ICT. GDP causes financial development, whereas energy consumption and GDP are interdetermined. The feedback hypothesis exists in the region; those countries need to develop alternative energy to replace fossil fuels. ICT does not threaten the environment and ICT policy can be seen as a part of carbon dioxide emissions reduction policy.

Policy makers need to know the relationship among energy use, economic growth and environmental quality in order to formulate rigorous policy for economic growth and environmental sustainability. This study analyzes the nexus among energy consumption, affluence, financial development, trade openness, urbanization, population and CO2 emissions in Ethiopia using data from 1970–2014. The ARDL cointegration results show that cointegration exists among the variables. Energy consumption, population, trade openness and economic growth have positive impact on CO2 in the long-run while economic growth squared reduces CO2 emissions which confirms that the EKC hypothesis holds in Ethiopia. In the short-run urbanization and energy consumption intensify environmental degradation. Toda-Yamamoto granger causality results indicate the bi-directional causality between energy consumption and CO2 emissions, CO2 emissions and urbanization. Financial development, population and urbanization cause economic growth while economic growth causes CO2 emissions. Causality runs from energy consumption to financial development, urbanization and population which in turn cause economic growth. From the result, CO2 emissions extenuation policy in Ethiopia should focus on environmentally friendly growth, enhancing consumption of cleaner energy, incorporating the impact of population, urbanization, trade and financial development.

This article analyses the relationships among carbon emissions, energy consumption, trade and economic growth in 12 Asia-Pacific economies. The results indicate the existence of four long-run equilibrium relationships among carbon emissions, energy consumption, trade and economic growth. These four variables are causally related to each other. The inverted-U environment Kuznets hypothesis is supported. The long-run elasticity of carbon emissions with respect to trade and energy consumption were 0.21 and 1.13, respectively. Furthermore, the empirical evidence from a dynamic panel error-correction model revealed two short-run unidirectional causalities: from trade to energy consumption and from energy consumption to GDP growth. The short-run results also showed two bidirectional causal relationships between energy consumption and carbon emissions and between economic growth and carbon emissions. These results suggest that Asia-Pacific economies undertake energy policy to reduce carbon emissions by increasing the energy efficiency and substantially increasing the share of renewable energy in the overall energy usage.

This article analyses the relationships among carbon emissions, energy consumption, trade and economic growth in 12 Asia-Pacific economies. The results indicate the existence of four long-run equilibrium relationships among carbon emissions, energy consumption, trade and economic growth. These four variables are causally related to each other. The inverted-U environment Kuznets hypothesis is supported. The long-run elasticity of carbon emissions with respect to trade and energy consumption were 0.21 and 1.13, respectively. Furthermore, the empirical evidence from a dynamic panel error-correction model revealed two short-run unidirectional causalities: from trade to energy consumption and from energy consumption to GDP growth. The short-run results also showed two bidirectional causal relationships between energy consumption and carbon emissions and between economic growth and carbon emissions. These results suggest that Asia-Pacific economies undertake energy policy to reduce carbon emissions by increasing the energy efficiency and substantially increasing the share of renewable energy in the overall energy usage.

This paper applies Pedroni's panel cointegration approach to explore the causal relationship between trade openness, carbon dioxide emissions, energy consumption, and economic growth for the panel of newly industrialized economies (i.e., Brazil, India, China, and South Africa) over the period of 1970-2013. Our panel cointegration estimation results found majority of the variables cointegrated and confirm the long-run association among the variables. The Granger causality test indicates bidirectional causality between carbon dioxide emissions and energy consumption. A unidirectional causality is found running from trade openness to carbon dioxide emission and energy consumption and economic growth to carbon dioxide emissions. The results of causality analysis suggest that the trade liberalization in newly industrialized economies induces higher energy consumption and carbon dioxide emissions. Furthermore, the causality results are checked using an innovative accounting approach which includes forecast-error variance decomposition test and impulse response function. The long-run coefficients are estimated using fully modified ordinary least square (FMOLS) method, and results conclude that the trade openness and economic growth reduce carbon dioxide emissions in the long run. The results of FMOLS test sound the existence of environmental Kuznets curve hypothesis. It means that trade liberalization induces carbon dioxide emission with increased national output, but it offsets that impact in the long run with reduced level of carbon dioxide emissions.

Publisher Summary This chapter discusses the financial development and economic growth in underdeveloped countries. An observed characteristic of the process of economic development over time, in a market-oriented economy using the price mechanism to allocate resources, is an increase in the number and variety of financial institutions and a substantial rise in the proportion not only of money but also of the total of all financial assets relative to GNP and to tangible wealth. Typical statements indicate that the financial system somehow accommodates—or, to the extent that it malfunctions, it restricts—growth of real per capita output. Such an approach places emphasis on the demand side for financial services; as the economy grows it generates additional and new demands for these services, which bring about a supply response in the growth of the financial system. In this view, the lack of financial institutions in underdeveloped countries is simply an indication of the lack of demand for their services.

Of recent times many countries are suffering from environmental problems such as global warming and emission of greenhouse gases. Emissions of carbon dioxide as been recognized as the major contributor to global warming and climate change. This paper examines the long run relationship among the variables environmental quality, financial development and economic growth in Kenya using time series for the period 1970-2019. Autoregressive distributed lag bounds test is used to investigate long run relationship and Granger causality method is used to test for causality among the variables. Empirical results indicate that there is long-run relationship among the variables. Long run results suggest that increases in financial development, lagged CO 2 , energy consumption, population growth, and trade openness significantly worsens environmental quality in Kenya. Natural resources significantly improve environmental quality in Kenya. According to the results the relationship between CO 2 and financial development in Kenya is non-linear suggesting presence of EKC between CO 2 and financial development. The empirical results confirm that the Environmental Kuznets curve does not exist between CO 2 and economic growth in Kenya in the long run. Short-run results also show that financial development, lagged CO 2 , FDI, population growth, and trade openness increase CO 2 emissions while natural resources reduce it. Causality results show unidirectional causality running from financial development to environmental quality and from CO 2 to GDP. According to the findings, there is evidence of neutrality hypothesis between financial development in Kenya and economic growth. Existence of long run relationship suggests that the government of Kenya needs to implement appropriate environmental policies that reduce pollution during economic growth. The government should set policies and guidelines to the financial sector so that the sector offers credit to firms that reduce air pollution. Keywords : Financial development, economic growth, CO 2 , Autoregressive distributed lag model, Kenya JEL Classification: E44, C32, Q43, Q56 DOI: 10.7176/JESD/11-12-03 Publication date: June 30th 2020

This study examines the impact of economic growth, energy consumption, trade openness, financial development on carbon emissions for the case of Turkey by using annual time series data for the period of 1960-2013. The Lee and Strazicich test suggests that the variables are suitable for applying the bounds testing approach to cointegration. The cointegration analysis reveals that there exists a long-run relationship between the per capita real income, per capita energy consumption, trade openness, financial development, and per capita carbon emissions in the presence of structural breaks. The results show that in the long run, carbon emissions are mainly determined by economic growth, energy consumption, trade openness, and financial development. The VECM Granger causality analysis indicates a long-run unidirectional causality running from economic growth, energy consumption, trade openness, and financial development to carbon emissions. The findings also show that the EKC hypothesis is valid for Turkey both in the long run and short run. The study provides some implications for policy makers to decrease carbon emissions in Turkey.

Environmental sustainability is one of the major concerns of countries worldwide regarding low carbon emissions. This study aims to investigate the impact of economic growth and energy consumption (EC) on carbon dioxide emission by utilizing panel methods. This study uses panel data from four selected South Asian countries for 30 years, from 1991 to 2020. The econometrics approach cointegration test (Pedroni, Kao, and Fisher), Fully Modified Ordinary Least Square (FMOLS), and Dynamic Ordinary Least Square (DOLS) used to examine long-run association and the impact of economic growth, EC (energy consumption), trade openness and urban population on carbon dioxide emission. The results of three-panel cointegration techniques, such as (Pedroni, Kao, and Fisher, confirm that all study variables are cointegrated. The study results show that all variables, such as energy consumption, economic growth, trade openness, and urban population, positively and statistically significantly impact CO2 emissions. The study results help all relevant stakeholders, including environmental scientists, professionals, and educators, make appropriate ecological sustainability policies, namely reducing carbon dioxide emissions in the study economy.

The primary goal of this research is to investigate the link between carbon dioxide emissions, energy consumption, and economic growth in Azerbaijan. Azerbaijan's economy is growing, and people have noticed that the country is using more energy. However, the issue of how this increase affects carbon dioxide emissions is controversial. The analyzes show that there is a linear relationship between energy consumption and carbon dioxide emissions. That is, as energy consumption increases, carbon dioxide emissions also increase. In addition, it is stated in the study that Azerbaijan focuses on fossil fuels in energy production and that this situation has an impact on carbon dioxide emissions. Policies such as increasing the use of renewable energy sources and increasing energy efficiency in Azerbaijan can help reduce carbon dioxide emissions. Finally, the Azerbaijan analysis shows that there is a linear relationship between energy consumption and carbon dioxide emissions, and policies such as the use of renewable energy sources and increasing energy efficiency can help reduce carbon dioxide emissions.

Fossil energy is the material basis of human survival, economic development and social progress. The relationship between energy consumption and economic growth is becoming increasingly close. However, energy consumption is the major source of greenhouse gases, which can significantly affect the balance of the global ecosystem. It has become the common goal of countries worldwide to address climate change, reduce carbon dioxide emissions, and implement sustainable development strategies. In this study, we applied an approximate relationship analysis, a decoupling relationship analysis, and a trend analysis to explore the relationship between energy consumption and economic growth using data from Kazakhstan for the period of 1993–2010. The results demonstrated: (1) the total energy consumption and GDP in Kazakhstan showed a ”U”-type curve from 1993 to 2010. This curve was observed because 1993–1999 was a period during which Kazakhstan transitioned from a republic to an independent country and experienced a difficult transition from a planned to a market economy. Then, the economic system became more stable and the industrial production increased rapidly because of the effective financial, monetary and industrial policy support from 2000 to 2010. (2) The relationships between energy consumption and carbon emissions, economic growth and energy exports were linked; the carbon emissions were mainly derived from energy consumption, and the dependence of economic growth on energy exports gradually increased from 1993 to 2010. Before 2000, the relationship between energy consumption and economic growth was in a recessional decoupling state because of the economic recession. After 2000, this relationship was in strong and weak decoupling states because the international crude oil prices rose and energy exports increased greatly year by year. (3) It is forecasted that Kazakhstan cannot achieve its goal of energy consumption by 2020. Therefore, a low-carbon economy is the best strategic choice to address climate change from a global perspective in Kazakhstan. Thus, we proposed strategies including the improvement of the energy consumption structure, the development of new energy and renewable energy, the use of cleaner production technologies, the adjustment and optimization of the industrial structure, and the expansion of forest areas.

Is the long-run relationship between economic growth, electricity consumption, carbon dioxide emissions and financial development in Gulf Cooperation Council Countries robust?

The first objective is to examine the trend analysis of the relationship between energy consumption and carbon dioxide on one hand and the trend analysis of the relationship between economic growth and CO2 emission on the other hand for the period of 1970-2017. The second objective is to determine the long-run relationship and direction of causality among the variables. To achieve this objective, the study used Granger causality test and the results shows a bi-directional causality between urban population and Energy consumption. The third objective is to examine the impact of urbanization, energy consumption, economic growth on carbon dioxide emission in Nigeria. To achieve this, the study employed autoregressive distributed lag (ARDL) test approach. The results show that in the short run, energy consumption and the previous lag of economic growth have a positive and significant impact on carbon dioxide emission in Nigeria. Only urban population has a negative but significant impact on CO2 emission in Nigeria. In the long run however, urbanization is still statistically significant but negative while energy consumption and economic growth still has a positive and significant impact on CO2 emission. The major reason is that the bulk of the country’s energy consumption is from non-renewable means. Thus, the study recommend appropriate measures and mitigation policies needs to be put in place to reduce the damage on the environment and to prevent further destruction.

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.