The nexus between greenhouse gases, economic growth, energy and trade openness in Vietnam

Abstract

This study explores the nexus between greenhouse gases (GHG) with economic growth (GDP), fossil fuel consumption (FEC), renewable energy (REC) and trade openness (TRO) in Vietnam by using the panel ARDL approach from 1980 to 2018 through the data set retrieved from the World Bank (2022). The results show that all four factors impact GHG emissions, in which GDP has the most substantial impact, followed by REC, FEC and TRO in the first-order model. While GDP, FEC and TRO have positive effects on GHG emission, REC indicates a negative effect, which means that more REC could reduce the release of GHG. However, the coefficient of this factor is only −0.311 compared to 0.622 of GDP at the same 1% significance level. The selected model seems to fit the investigated data with an adjusted R 2 of approximately 0.929. The results also demonstrate that the second and third forms of GDP to GHG emissions are unsuitable for the data. Based on the analysis results, the study also proposes some policy implications which reduce the intensity of GHG but still promote economic growth as follows: (1) reduce greenhouse gas emissions the contribution to GDP growth such as industry, construction, transport, agriculture, tourism services which green technology; (2) reduce the use of fossil energy and replace it with renewable energy sources; (3) perfecting the legal framework to encourage economic sectors and businesses to effectively use natural resources, especially re-valuing the cost of carbon emissions. • Unit root test with multiple structural breaks and autoregressive distributed lag bounds test have been used. • The relationship between GDP, TRO, REC, FEC with GHG in Vietnam during 1980-2018 were fitted with first-order model. • GDP, TRO, FEC have positive effect on GHG while REC is vice versa. • A rejection of EKC hypothesis indicated the impact of REC.