Abstract
Corruption reflects a set of illegal activities that jeopardize the smooth functioning of economies, society, and climate and environmental issues. This article tests the relationships between economic growth, corruption, renewable energies, international trade, and carbon dioxide emissions using panel data for European countries, namely Portugal, Spain, Italy, Ireland, and Greece, from 1995–2015. As an econometric strategy, this research uses the panel fully modified least squares (FMOLS), panel dynamic least squares (DOLS), and panel two-stage least squares estimator (TSLS). Considering the variables utilized in the research and the panel unit root test, we observed that the variables are integrated I (1) in the first difference. The variables of corruption, economic growth, renewable energies, international trade, and carbon dioxide emissions are cointegrated in the long run, using the Pedroni and Kao residual cointegration test arguments. The methodology of Dumitrescu–Hurlin to test the causality between carbon dioxide emissions, corruption, economic growth, and renewable energy shows that there is unidirectional causality between carbon dioxide emissions and corruption and economic growth and corruption. The results suggest that the corruption index and economic growth have a statistically significant positive impact on carbon dioxide emissions. However, renewable energies and international trade reduce climate change and improve the environmental quality.
Highlights
IntroductionPublisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations
The results found that squared income per capita and renewable energy decrease climate change
This section exhibits the econometric results to test the relationship between corruption, economic growth, renewable energy, international trade, and carbon dioxide emissions
Summary
Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. The various international conferences and agreements on the environment have stimulated economists and policymakers to assess the impact of corruption and renewable energies on climate change. The monopolistic competition models in international trade have demonstrated the importance of innovation as a factor that facilitates sustainable development, reducing greenhouse effects (e.g., Leitão 2021; Leitão and Balogh 2020). Economists have assessed the relationship between corruption and economic growth, as well as corruption and carbon dioxide emissions. The empirical studies demonstrate that corruption affects economic growth, air quality, and climate change
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