Fourier quantile unit root test for the integrational properties of clean energy consumption in emerging economies

Abstract

Since the adoption of the Kyoto protocol in 1997 and its entry into force in 2005, as well its aftermath such as the Doha amendment and Paris agreement, national policies have become more conscious of the usage of clean energy, mostly the different forms of renewable energy and nuclear energy. Ratifying countries and signatories had committed themselves to binding targets for the reduction of greenhouse emissions by 8% with respect to 1990 levels until 2012, also based on the particular contribution to global emissions from each country. This paper examines the integrational properties of clean energy consumption from eight emerging economies which are also high greenhouse gas emitters. The empirical results show that the clean energy consumption is stationarity for Brazil and Philippines by using a quantile unit root test without smooth breaks (Koenker and Xiao, 2004). However, after capturing the smooth breaks (Bahmani-Oskooee et al., 2018), we find the clean energy consumption of China, Pakistan and Thailand are stationary. The time-varying deterministic trend with smooth breaks is more fitted to the path of clean energy consumption in comparison to the deterministic trend without smooth breaks. The paper suggests economic insights useful for policy making.