Abstract
Using the panel vector autoregressive (PVAR) model accompanied by the system-generalized method of moment (System-GMM) approach, this paper investigates the dynamic causality between participation in global value chains (GVCs), renewable energy consumption and carbon dioxide (CO2) emissions throughout 1990–2015 for 172 countries. The results show that participation in GVCs negatively causes renewable energy consumption except for the Middle East and North America (MENA) and sub-Saharan Africa. Second, except for the Asia–Pacific region and globally, participation in GVCs has no causal impact on CO2 emissions, and participation in GVCs has a positive effect on CO2 emissions in the Asia–Pacific region and globally. Third, except for globally and sub-Saharan Africa, CO2 emissions have no causal impact on participation in GVCs; however, CO2 emissions hurt participation in GVCs globally and in the sub-Saharan African region. Forth, renewable energy consumption positively causes participation in GVCs in MENA, while renewable energy consumption does not cause participation in GVCs globally and in other regions. Fifth, there is no causality between CO2 emissions and renewable energy consumption both at the global and regional levels. Several policy implications are proposed and discussed for promoting participation in GVCs and improving the environment.
Highlights
Global climate warming and energy scarcity are consensually regarded as the most challenging and threatening global environmental issues, which will severely affect all aspects of human life and health [1,2,3,4]
The results show that the participation in global value chains (GVCs) negatively causes renewable energy consumption at the 1% level of significance, which indicates that renewable energy consumption decreases 0.0637% when participation in GVCs increases by 1%
This result supports the finding of De Vries and Ferrarini [82], who found that a substantial share of CO2 emissions growth in emerging countries accounted for increasing participation in GVCs, and contradicts the findings of Sun et al [83], who found that the promotion of participation in GVCs could reduce CO2 emissions significantly in developing countries compared with those in developed countries
Summary
Global climate warming and energy scarcity are consensually regarded as the most challenging and threatening global environmental issues, which will severely affect all aspects of human life and health [1,2,3,4]. To ensure the energy security and sustainable development of human society, the relevant international organizations, policymakers and researchers have highlighted the significance of governing global warming and reducing greenhouse gas (GHG) emissions. As production sharing becomes the significant characteristic of today’s global economy [5], much debate about the environmental consequences of participation in global value chains (GVCs) has emerged [6]. According to the recent report of the United Nations’ Sustainable Development Goals, “Global supply chains play a critical role in many of the most pressing environmental stresses and social struggles” [7], which clearly emphasizes the effect of GVCs on the environment. These contradictory views make it a challenge for policymakers to make reasonable and consistent industrial development policies aiming at increasing the share of participation in GVCs while concurrently protecting the environment and saving energy
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