Time Series Analysis for the Dynamic Relationship between an Enterprise’s Business Growth and Carbon Emission in Taiwan

Yu-Jia Ding,Pi-Chu Wu,Yu-Hui Lian

doi:10.3390/su12145560

Abstract

Since the Paris Agreement came into effect in 2016, governments worldwide have established goals for future carbon emission reduction. Enterprises and governments have begun to pay attention to the management of carbon emission. This study explored the dynamic relationship between business growth and carbon emission performance by constructing and using a time series model to predict the trend of carbon emission. The time series method (ADF unit root test, cointegration test and VAR model etc.) was adopted to investigate 805 companies listed on the Taiwan Stock Exchange from 2012 to 2017 as the sample of this study. The carbon emission performance variables include: total carbon emission, annual increase of carbon emission, and annual increase rate of carbon emission. The business growth variables include: growth rate, stability of growth, and years of establishment. The results showed a long-term dynamic relationship between business growth and carbon emission performance. Therefore, using the time series method can assist enterprises in developing green strategies, strengthen carbon emission prediction and management capacities, reduce operating costs and risks, and actively achieve the ideal of sustainable development.

Highlights

Carbon emission has affected the environment, ecology, economics, society, and human health
A total of 805 companies were chosen for this study and their business growth data retrieved from the Taiwan Economic Journal (TEJ) database offers the most timely updates on all the countries in Asia
Under the Paris Agreement, consensus has been reached worldwide regarding the need for developing carbon emission reduction strategies and the potential benefits of carbon neutrality

Summary

Introduction

Carbon emission has affected the environment, ecology, economics, society, and human health. In 1992, the United States convened an Earth Summit in Brazil which passed the United Nations Framework Convention on Climate Change for controlling the amount of artificially produced carbon emission. In 1997, the United Nations developed the Kyoto Protocol to serve as a basis for carbon emission management and reduction. Enterprises need to follow the global climate change convention, use low-pollution equipment, and improve R&D technology to lower the operational risks faced by carbon reduction [1]. How to use industrial development policies to reduce greenhouse gas emissions, create green business opportunities and competitiveness was pointed out, and this has become the industry’s highest priority for sustainable management [2]. Low-carbon industrial policy can contribute to both environmental and social sustainability [4]

Objectives

Methods

Conclusion