Abstract
In environmental management, many studies have examined the energy consumption-emission nexus in detail. However, for the first time in the literature, this study considers how the Economic Complexity Index (ECI) and economic policy uncertainty (EPU) moderate the contribution of energy consumption to emissions for the four World Bank Income clusters. The system generalised methods of moments are applied to data for 109 countries from 1996 to 2016. Based on the main model (grouped clusters) estimations, the result revealed the existence of the environmental Kuznets curve (EKC) hypothesis. Also, an increase in air transport and consumption of energy releases more carbon emissions to the climate. Interestingly, ECI decreases carbon emission significantly while EPU does not have a significant impact. Moreover, the study revealed that ECI moderated the impact of other variables on emission, but EPU is not a significant moderator. Furthermore, a comparative analysis among the four incomes suggests that the EKC hypothesis holds only in the high-income clusters; ECI is a significant predictor of carbon emission in the four clusters, but it only decreases the emission in high-income clusters. This corroborates the debate on climate change and the productive capacity of high-income countries. Given the foregoing, several policy measures were recommended.
Highlights
In today’s world, climate change is arguably the most severe challenge of our time with long-term serious impacts for a sustainable low carbon future of our planet
This study examines the determinants of carbon emissions, introducing the level of economic complexity and economic policy uncertainty
This study examines the determinants of carbon emissions, and special interest is given to the level of economic complexity and economic policy uncertainty as moderating variables
Summary
In today’s world, climate change is arguably the most severe challenge of our time with long-term serious impacts for a sustainable low carbon future of our planet. Climate change due to global warming is one of the defining issues of our time. The main cause of climate change is the greenhouse effect (Satrovic, 2019). Fossil fuels release carbon dioxide and other greenhouse gases into the air, causing the planet to heat up. Human activity is the main cause of climate change. More and more attention from all over the world has been paid to the issue of how to reduce carbon emissions and mitigate climate change. Clarifying the influence of the factors behind the growth of greenhouse
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