Trade in green commodities and energy security: Evidence of nonlinear linkages from international database

Abstract

Our paper presents the first attempt to examine the non-linear relationship between the trade value of environmental commodities (TVEC) and energy security (ESP). Seven indicators are used in this article to illustrate four aspects of energy security, namely availability, acceptability, developability, and sustainability. We conducted our analysis by applying a variety of econometric techniques to a sample of 49 countries with low-incomes and low-middle-incomes (LI&LMICs), 33 countries with upper-middle-incomes (UMICs), and 42 countries with high-incomes (HICs). A nonlinear relationship has been demonstrated between the trade of environmental commodities (TVEC) and non-fossil energy consumption, energy intensity, energy consumption, CO2 emissions, and renewable energy consumption, indicating that the trade of green goods is beneficial for energy system acceptability, develop-ability, and sustainability. There is also evidence that TVEC and ESP exhibit long-term cointegration, and our results confirm this. The effect of TVEC on ESP varies dramatically between the subsamples by income level, with high-income countries showing a more apparent nonlinear relationship between TVEC and ESP.