Abstract
This article considers the relationship between trade intensity, energy consumption, income per capita, and carbon dioxide emissions from 1970–2016 for the Portuguese economy. Considering the arguments of monopolistic competition, the article tests the hypotheses of trade and energy consumption on climate change. We use the autoregressive distributed lag-ARDL model, quantile regression, and cointegration models such as fully modified ordinary least squares (FMOLS), canonical cointegration regression, and dynamic ordinary least squares (DOLS) as an econometric strategy. The econometric results have support with the literature review. The variables used in this research are integrated with the first differences, as indicated by the unit root test. The empirical study proves that trade intensity contributes to environmental improvements. However, energy consumption presents a positive impact on CO2 emissions. The econometric results also demonstrated that a sustainable environmental system exists in the long run.
Highlights
The World of Heath Organization reports, the Intergovernmental Panel on ClimateChange (IPCC-2013), the United Nations Framework Convention on Climate Change (United Nations Framework Convention on Climate Change (UNFCCC) (1992)), KyotoProtocol (Kyoto Protocol to the United Nations Framework Convention on Climate Change1997), and Paris Agreement (2015) showed that it should be necessary to change the paradigm of economic growth
We use the econometric results using quantile regressions for nine quantiles to compare the differences between the regressors and the cointegration models (FMOLS, CCR, and dynamic ordinary least squares (DOLS))
Considering the relationship between the independent variables and carbon dioxide emissions, we observe that energy consumption (LogEC) and income per capita are positively correlated with CO2 emissions
Summary
1997), and Paris Agreement (2015) showed that it should be necessary to change the paradigm of economic growth. The growth of economic activities is associated with energy consumption and efficiency. Non-renewable energy consumption is responsible for pollution and environmental damage. Greenhouse gas, precipitation, and air temperature stimulated a change in the world economics mentality. The environmental rules and environmental taxation cause higher costs of adjustment in economies, namely in international trade. In this line, the empirical studies demonstrated that trade liberalization and trade intensity aimed to decrease pollution, showing that carbon dioxide emissions decrease
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