Technology-Intensive Trade, Economic Growth and CO2 Emissions: ARDL Bounds Test Approach and Causality Analysis for BRICS

Farha Fatema ,Mohammad Monirul Islam

doi:10.34257/gjmbrbvol19is6pg53

Abstract

This study identified long-run and short-run relationship as well as causal direction of medium and high tech (MHT) trade (proxy for tech-intensive trade), economic growth and CO2 emissions in BRICS for the period of 1992-2015 applying ARDL bound test approach and error-correction based Granger causality. The disequilibrium (non-stationary) characteristics of CO2 emissions in China during 1992-2014, along with unavailability of MHT trade data prior to 1992, constrained the analysis of short-run and long-run relationship among the variables for the country. The study found that structural change did not affect CO2 emissions in India and Russia in the long-run but it did in the short-run in India. The study did not find any long-run cointegration among the variables for South Africa. It identified long-run causality running from MHT trade and growth to CO2 emissions for India and Russia, whereas long-run causality directed from MHT trade and CO2 emissions to growth was found in Brazil and India, and causality running from CO2 emissions and growth to MHT trade only held for India.

Highlights

This study identified long-run and short-run sustainable world which is given a noteworthy focus in relationship as well as causal direction of medium and high SDGs
The study did not find any long-run cointegration among the variables for South Africa. It identified long-run causality running from medium and high tech (MHT) trade and growth to CO2 emissions for India and Russia, whereas long-run causality directed from MHT trade and CO2 emissions to growth was found in Brazil and India, and causality running from CO2 emissions and growth to MHT trade only held for India
According to scale effect, growing trade upsurges global economic activities which affects the environment. This effect of trade is “ceteris paribus” type that means the higher the international trade, the higher the global economic activities and environmental pollution policy suggestion provided by this study is that there is no considering other factors constant such as trade generalized proposition when it comes to the nexus between MHT trade, economic growth and CO2 emissions

Summary

Introduction

This study identified long-run and short-run sustainable world which is given a noteworthy focus in relationship as well as causal direction of medium and high SDGs. Ever-growing CO2 emissions and other tech (MHT) trade (proxy for tech-intensive trade), economic greenhouse gasses in the atmosphere are considered growth and CO2 emissions in BRICS for the period of 19922015 applying ARDL bound test approach and error-correction based Granger causality. According to scale effect, growing trade upsurges global economic activities which affects the environment This effect of trade is “ceteris paribus” type that means the higher the international trade, the higher the global economic activities and environmental pollution policy suggestion provided by this study is that there is no considering other factors constant such as trade generalized proposition when it comes to the nexus between MHT trade, economic growth and CO2 emissions. The 2030 Agenda the pollution haven hypothesis (Copeland and Taylor for sustainable development acknowledges international (1994) which postulates that due to strict environmental trade as a pivotal mechanism for achieving a number of regulations in developed countries pollution-intensive specific goals and targets of SDGs (Hoekman, 2016). industries tend to establish in developing countries

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