The Race to Zero Emissions in MINT Economies: Can Economic Growth, Renewable Energy and Disintegrated Trade Be the Path to Carbon Neutrality?

Abstract

The current paper evaluates the role of disintegrated trade, financial development, and renewable energy on consumption-based carbon emissions (CCO2) in MINT nations between 1990Q1 and 2019Q4. This paper utilizes the novel Bootstrap Fourier Granger causality in quantiles (BFGC-Q) to evaluate this connection. This approach produces tail-causal and asymmetric causal connections between the indicators within the Fourier approximation, contrary to the Toda–Yamamoto causality and other conventional Granger tests. The outcomes uncover a unidirectional causality from economic growth and renewable energy to CCO2 emissions in each MINT nation. Moreover, unidirectional causality emerged from financial development to CCO2 for Indonesia, Nigeria, and Turkey. Moreover, exports have predictive power over CCO2 in Indonesia, Turkey, and Mexico, while imports only have predictive power over CCO2 emissions in Turkey. Lastly, financial development causes CCO2 in Indonesia, Nigeria, and Mexico. In summary, green energy and exports are essential factors that decrease CCO2 emissions and therefore decrease ecological deterioration in Mexico, Indonesia, and Turkey. On the flip side, imports only trigger CCO2 emissions in Turkey and Mexico. Lastly, the financial development effect on CCO2 emissions is positive in Mexico, Indonesia, and Nigeria, while an insignificant impact is found in Turkey. Based on these findings, policy ramifications are initiated.