Unveiling the nexus of renewable energy, institutional quality and financial development in India’s carbon emission landscape

PurposeThe purpose of this paper is to examine the impacts of (non-renewable and renewable) energy consumption and trade on environmental pollution in an environmental Kuznets curve (EKC) setting in Turkey for the 1965–2016 period.Design/methodology/approachBesides conventionally used unit root tests, Zivot–Andrews unit-root test is also employed to account for a possible structural break. To investigate the interrelationships among the variables, the autoregressive distributed lag and the vector error correction methodologies are employed.FindingsThe results verify the EKC hypothesis. Moreover, increases in trade and non-renewable energy consumption rise carbon emissions in long run, while renewable energy consumption reduces it in both short- and long-run. The causality analysis reveals that there are bi-directional long-run causalities between non-renewable energy consumption and carbon dioxide emissions, and between trade and carbon dioxide emissions. Additionally, the neutrality hypothesis is valid for the renewable energy consumption-income nexus in both short- and long-run. For the non-renewable energy consumption-income nexus, the neutrality hypothesis holds only in short-run and the conservation hypothesis holds only in long-run.Originality/valueThis is the first study which incorporates both renewable energy consumption and trade into its environmental pollution model for Turkey. Moreover, by investigating short- and long-run causalities among the employed variables, more robust policy implications are put forward. Lastly, this study employs a longer sample period and considers a structural break in its models.

This study investigates the impacts of income, (renewable and non-renewable) energy consumption, trade, and financial development on carbon dioxide emissions in Turkey for the 1965-2015 period by employing thenon-linear autoregressive distributed lag method. Results show that non-renewable and renewable energy consumption, and trade openness have asymmetric impacts on pollution in long-run, while only renewable energy consumption has asymmetric impact on emissions in short-run. Results further reveal that the Environmental Kuznets Curve hypothesis is not valid in Turkey. Moreover, both financial development and trade positively affect emissions. Additionally, in long-run, positive shocks in renewable and non-renewable energy consumption increase emissions, but the impact of renewable energy consumption is infinitesimally small compared to the impact of non-renewable energy consumption. However, negative shocks in renewable energy consumption increase emissions, whereas negative developments in non-renewable energy consumption decrease emissions. Further, in short-run, positive developments in renewable energy consumptiondecrease emissions, and negative developments in non-renewable energy consumption have the same influence on emissions. In accordance with the findings, some policy suggestions are proposed.

Publisher Summary This chapter discusses the financial development and economic growth in underdeveloped countries. An observed characteristic of the process of economic development over time, in a market-oriented economy using the price mechanism to allocate resources, is an increase in the number and variety of financial institutions and a substantial rise in the proportion not only of money but also of the total of all financial assets relative to GNP and to tangible wealth. Typical statements indicate that the financial system somehow accommodates—or, to the extent that it malfunctions, it restricts—growth of real per capita output. Such an approach places emphasis on the demand side for financial services; as the economy grows it generates additional and new demands for these services, which bring about a supply response in the growth of the financial system. In this view, the lack of financial institutions in underdeveloped countries is simply an indication of the lack of demand for their services.

Renewable and non-renewable energy consumption in Bangladesh: The relative influencing profiles of economic factors, urbanization, physical infrastructure and institutional quality

To date, a sufficient number of studies have dealt with the effect of financial development on energy consumption. Yet, most of these studies have neglected diversification between renewable and non-renewable energy consumption. In fact, financial development may affect renewable energy consumption differently than non-renewable energy consumption. This is because renewable energy production necessitates high-cost investments. Therefore, the main objective of this study is to estimate the impact of financial development on renewable and non-renewable energy consumption in 37 OECD countries by employing the one-step system generalized method of moments (GMM) for the period 2002–2015. The findings statistically proved that financial development is positively linked with renewable energy consumption, but it is not related to non-renewable energy consumption. This paper also confirmed the existence of a negative correlation between the openness index and renewable energy consumption with non-renewable energy consumption. Intuitively, it was expected that renewable energy production engages in high-cost investments compared to non-renewable energy production. Thus, renewable energy consumption is more responsive to a solid and well-structured financial market than non-renewable energy consumption.

In the extant literature, there are numerous discussions on China’s environmental sustainability. However, few scholars have considered renewable energy consumption and trade policy simultaneously to debate environmental sustainability. Therefore, this paper attempts to examine how renewable and non-renewable energy consumption, bio-capacity, economic growth, and trade policy dynamically affect the ecological footprint (a proxy for environmental sustainability). Using the data from 1971 to 2017 and employing the auto-regressive distributed lag model to perform an empirical analysis, the results demonstrate that renewable energy consumption and trade policy are conducive to environmental sustainability because of their negative impacts on the ecological footprint. However, the results also indicate that bio-capacity, non-renewable energy consumption, and economic growth are putting increasing pressure on environmental sustainability due to their positive impacts on the ecological footprint. Moreover, to determine the direction of causality between the highlighted variables, the Yoda-Yamamoto causality test was conducted. The results suggest a two-way causal relationship between renewable energy consumption and ecological footprint, non-renewable energy consumption and ecological footprint, and economic growth and ecological footprint. Conversely, the results also suggest a one-way causal relationship running from bio-capacity and trade policy to the ecological footprint.

This study examines the effects of renewable and non-renewable energy consumption and economic growth on CO2 emissions for 53 developing countries during the period 1990-2014. For this purpose, the study employs a two-step difference Generalized Method of Moments (GMM) approach. Empirical results show that there is an inverted U-shaped relationship between economic growth and CO2 emissions, which shows the validity of the environmental Kuznets curve (EKC) hypothesis. The effect of renewable energy consumption (REC) on CO2 emissions was found to be negative and significant, while the effect of non-renewable energy consumption (NREC) was positive and significant. Moreover, both renewable and non-renewable energy consumption positively affect economic growth. Thus, for developing countries aiming to reduce CO2 emissions and the consequent environmental pollution, it is necessary to reduce the share of NREC in total energy consumption and to increase the share of REC. Furthermore, because NREC positively affects economic growth, the efficiency of non-renewable energy resources should be increased in order not to damage the economic growth process while decreasing the use.

Macroeconomic determinants of non-renewable and renewable energy consumption in India: The roles of international trade, innovative technologies, financial globalization, carbon emissions, financial development, and urbanization

Testing environmental Kuznets curve hypothesis: The role of renewable and non-renewable energy consumption and trade in OECD countries

Assessment of the role of renewable energy consumption and trade policy on environmental degradation using innovation accounting: Evidence from the US

The study examined the dynamic nexus between carbon footprints, nonrenewable energy and renewable energy consumption, financial development and economic growth, and combating climate change by using a dataset of selected 13 Asian emerging economies (Bangladesh, China, India, Indonesia, Iran, Malaysia, Nepal, Pakistan, Philippines, South Korea, Sri Lanka, Thailand, and Vietnam) from 1995 to 2020. This study empirical analysis uses the second generation of panel cointegration techniques to compensate for cross-sectional dependency and slope heterogeneity. The mean group, the common correlated effects mean group, and the augmented mean group are used to estimate the long-run equations. The findings suggest that economic growth and nonrenewable energy consumption exacerbate environmental degradation, but renewable energy consumption mitigates the total adverse effects on the environment over time. Additionally, economy-specific findings examine how the impact of nonrenewable energy and renewable energy consumption on the carbon footprint depends on energy consumption level. Furthermore, the Dumitrescu-Hurlin causality test reveals a statistically significant bidirectional correlation between financial development, carbon footprints, economic growth, and consumption of nonrenewable energy and renewable energy. Finally, the study says that Asian emerging economies should use more renewable energy and be more efficient in order to reduce their carbon footprints.

Symmetric and asymmetric impact of economic growth, capital formation, renewable and non-renewable energy consumption on environment in OECD countries

This study investigates the role of energy imports in domestic production function in the case of 15 energy-importing countries for the period of 1995–2015. Apart from energy imports, renewable energy consumption, non-renewable energy consumption, capital, trade openness, and urbanization are included in the growth model. In doing so, long-run elasticity coefficients are estimated with the Dynamic Seemingly Unrelated Regressions (DSUR) model after determining the cointegration relationship between the variables. In addition, for robustness checks, Panel Correlated Standard Errors (PCSE) and Feasible Generalized Least Squares (FGLS) estimators are applied. Our results show that renewable energy consumption, non-renewable energy consumption, trade openness, and capital have a positive effect on economic growth. Energy imports negatively affect economic growth. The Dumitrescu-Hurlin causality analysis reveals a bidirectional causality relationship between renewable energy consumption, capital, trade openness, urbanization, and economic growth. A unidirectional causality relationship exists from economic growth to non-renewable energy consumption and energy imports. This analysis can be interpreted as having a negative impact on economic growth by putting pressure on the current account deficit due to energy imports. Therefore, investments in the renewable energy sector will play an important role in economic growth.

Renewable and Non-Renewable Energy Consumption, Carbon Dioxide Emissions, and Economic Growth: Empirical Evidence from Central Asian Countries Bolor-Erdene Turmunkh Abstract This study examines the relationships between non-renewable and renewable energy consumption, carbon dioxide emissions, economic growth, and population in Central Asian countries after the transition economics with the Panel Granger Causality, Panel Cointegration, and Panel non-stationarity tried to explain using the causality test, using 1992 to 2019 data from the World Development Indicators (WDI). The engagement of developing countries is an increasingly important part of addressing greenhouse gas (GHG) emission-driven climate change. As such, understanding the patterns of energy use, GHG emissions, and economic growth in developing countries is vital. Major Central Asian countries are important in this respect due to their size, rapid growth, and extensive energy reserves. It has experienced rapid growth in its economy, energy consumption, and GHG emissions in recent years. It performs tests to verify the existence of the longrun relationships among the variables and examines short and longrun causal relationships. It finds that increased fossil fuel use is the main cause of increased carbon dioxide (CO2) emissions. Full Text: PDF DOI: 10.15640/jeds.v9n1a7

The role of international tourism, trade openness and renewable energy in the financial development of selected African countries