Consumption-based Carbon Emissions Research Articles

Effects of geopolitical risk on environmental sustainability and the moderating role of environmental policy stringency

This study investigates the impact of geopolitical risk (GPR) on consumption-based carbon (CCO2) emissions as well as the moderating role of environmental policy stringency (EPS) on the above relationship. Based on data collected from 27 countries from 1990 to 2020, the basic results from the sample of the study indicate that GPR accelerates CCO2 emissions. Quantile regression results reveal that the effect of GPR is more pronounced in countries with higher CCO2 emissions. Moreover, EPS weakens the escalating effect of GPR on CCO2 emissions. The robust test results validate the findings reported in the basic regression model. The heterogeneity test indicates that the impact of GPR on CCO2 emissions is greater in developing countries compared in developed countries. The study also proposes these policy implications based on the findings: (1) countries should ensure a stable political environment, establish a robust legal system and promote energy transition; and (2) the scope of environmental taxes should be expanded where different tax rates should be imposed in order to be useful in reducing CCO2 emissions.

Decoupling and decomposition of emissions and economic growth in Guangdong: A perspective of embodied carbon flow

Decoupling the dependence on carbon emissions from achieving high-quality economic development is a paramount objective for China. However, the often-overlooked aspect is the carbon emissions generated through trade activities, which can lead to an overestimation of decoupling progress. Our study quantified and compared the decoupling status of production-based and consumption-based carbon emissions from economic growth in Guangdong from 2002 to 2017 from the perspective of inter-provincial embodied carbon flow, and further investigated its driving factors. The results reveal that consumption-based carbon emissions consistently surpass production-based emissions, although they exhibited a steady decline in recent years. As a significant contributor to embodied carbon emissions, Guangdong outsources a considerable portion of its emissions to less developed regions such as Liaoning and Guangxi by importing raw or intermediate products with lower value-added raw, while it exports service products to provinces like Beijing and Zhejiang. Decoupling analysis indicated that Guangdong is progressively moving towards an optimal state of "double decoupling", where both production and consumption-based carbon emissions are decreasing. This represents a departure from the previous scenario of "fake decoupling", characterized by a reduction in production-based carbon emissions but persistently high consumption-based emissions. Additionally, our structural decomposition analysis highlights the potential for reducing carbon emissions and enhancing decoupling by increasing the utilization of clean energy and optimizing the trade input structure. These findings underscore the importance of accounting for embodied carbon emissions in decoupling studies and offer valuable insights for achieving high-quality development.

Testing the impact of environmental taxation and IFRS adoption on consumption-based carbon in European countries.

Several governance regulations have been adopted in European countries to promote environmental sustainability, such as environmental taxation and environmental disclosures in financial reports. In this context, this paper examines the linkage between environmental taxation, International Financial Reporting Standards (IFRS), and environmental sustainability in European countries from 1994 to 2018. Unlike earlier empirical studies, the present work is the first to assess the impact of environmental taxation and IFRS adoption on consumption-based carbon emissions. In order to yield valid and reliable outcomes, the modern econometric method that is vigorous to cross-sectional dependence and slope heterogeneity was employed. Likewise, the study uses the novel method of moment quantile regressions (MMQR). The MMQR outcomes illustrated that environmental taxation significantly negatively affects consumption-based emissions in European countries, indicating that environmental taxation has a positive effect on the ecological sustainability. Besides, the findings show that IFRS negatively affects consumption-based emissions, while economic growth positively affects the level of consumption-based emissions. Therefore, European governments must use fiscal and financial policies to mitigate ecological pollution. Moreover, more environmental, social, and governance (ESG) disclosure in European industries could also help promote environmental sustainability in European countries.

Bridging the green gap: Do green finance and digital transformation influence sustainable development?

Understanding the complex socio-economic factors that impact climate change is crucial for developing strategies to reduce their negative environmental impacts. Therefore, the present study explores the association that exists among green finance, digital transformation, and consumption-based carbon emissions, with a specific focus on selected OECD economies from 1995 to 2020. In this study, we have divided digital transformation into two categories, namely digital technology exploration and digital technology readiness. The results of the investigation underscore the key role of green finance in limiting carbon emissions and highlight the role of digital technology readiness in boosting the quality of the environment. In contrast, digital technology exploration positively influences and enhances carbon emissions in OECD economies. Furthermore, the findings also indicate that exports reduce carbon emissions, while imports and economic growth are significantly associated with an increase in carbon emissions. The findings of this study have significant policy implications, advocating for a comprehensive strategy to promote green finance, encourage digital transformation, and support environmentally friendly organizations.

Carbon Emission Drivers and Critical Paths in the Interaction of the "Local-Domestic-International" Economic Cycle - A case study of Beijing

Abstract It is crucial to study the carbon emissions worldwide induced by urban consumption activities. Taking consumption-oriented city Beijing as an example, we constructed a nested multi-regional input-output model (MRIO), and measured carbon emissions and value-added in local, domestic, and international systems. Furthermore, the structural decomposition analysis (SDA) and structural path analysis (SPA) was applied to analyze cross-system driving forces and key paths of carbon emission changes. The conclusions show: (1) Beijing's consumption leads to the highest carbon emissions in the domestic system but the highest value-added in the local system. There is spatial inconsistency in carbon emissions and value-added. (2) The intermediate commodity input-output effect (ICIOE) of intra-domestic provinces is the main driving factors contributing to the reduction of carbon emissions. In contrast, the ICIOE of inter-domestic provinces is the main factor leading to the rise. (3) In the top 10 types of key paths for Beijing’s consumption-based carbon emissions (CBCE) growth, electric power and construction sectors in domestic systems are key sectors. Chemical products and transport equipment in foreign systems are key sectors for Beijing’s CBCE decrease. Our findings suggest Beijing enhancing cross-system cooperation to achieve carbon reduction targets. JEL classification numbers: R15. Keywords: Consumption-based carbon emissions, Multi-regional input-output, Structural decomposition analysis, Structural path analysis.

Interdependency and causality between green technology innovation and consumption-based carbon emissions in Saudi Arabia: fresh insights from quantile-on-quantile and causality-in-quantiles approaches.

In this paper, we examined the asymmetric dynamics and causality of technological progress--proxied by green technology innovation--on both consumption-based carbon (CCO2) and territory-based carbon (TCO2) emissions in Saudi Arabia using quarterly data from 1990Q1 to 2021Q4. Our initial results reject the normality and linearity assumptions of data series and thus emphasize that the observed associations are quantile dependent. We firstly utilized the quantile-on-quantile regression (QQR) approach to draw the interdependency between green technology innovation and both CCO2 and TCO2 emissions. We found a strong emission-mitigating impact of green technology innovation only at (extreme) upper emission levels. We also identified a weak positive effect at (extreme) higher emission quantiles. Furthermore, we found that higher emission levels are linked with lower green technology innovation across all emission quantiles whereas a weak positive effect is perceived at lower and medium emission quantiles. We further utilized linear and nonlinear Granger causality-in- quantiles (GCQ) tests to capture an entire picture of the impact of green technology innovation on both CCO2 and TCO2 emissions. Under linear specifications of the quantile regression model, we found evidence of strong bidirectional causality between carbon emissions and green technology innovation across lower and upper quantiles. However, we found unidirectional causalities from carbon emissions to green technology innovation at medium quantiles of the conditional distribution. Besides, there is no causality at both extreme lower and extreme upper quantiles. Under nonlinear specifications of the quantile regression model, we found a weak unidirectional causality from green technology innovation to carbon emissions at (extreme) lower quantiles. We also found a weak unidirectional causality from carbon emissions to green technology innovation at medium and extreme upper quantiles. Overall, our findings indicate that green technology innovation helps abate both CCO2 and TCO2 emissions in Saudi Arabia. Our study shows policies that target green technology innovation would significantly change carbon emissions.

Race to Top or Race to Bottom Approach: Disaggregated Effect of Fiscal Decentralization and Its Implications for Consumption-Based Carbon Emissions

Race to Top or Race to Bottom Approach: Disaggregated Effect of Fiscal Decentralization and Its Implications for Consumption-Based Carbon Emissions

Navigating the green future: Unraveling the role of fintech, decentralization, natural resources, and monetary policy uncertainty in China

Improving environmental integrity is a crucial policy agenda in achieving sustainable development goals, and reliable carbon emission measure is imperative in devising an effective climate strategy. Increasing climate susceptibility instigates us to explore the factors of ecological sustainability. Therefore, we scrutinize the dynamic influence of monetary policy uncertainty, mineral resources dependency, Fintech, fiscal decentralization, and trade on consumption-based carbon emissions (CCE) in China using the quarterly data from Q1-2005 to Q4-2021. For estimation, the study employed the bootstrap autoregressive distributed lag (ARDL) method, and the overall findings exhibit that fiscal decentralization significantly decreases the CCE, while monetary policy uncertainty, Fintech, and natural resources dependency increase CCE. Imports are responsible for higher CCE, while exports report the opposite. Consistent findings are endorsed by the short-run estimates with lower magnitude, and the error correction term significantly adjusts towards the steady state equilibrium with 61.0% quarterly adjustment in case of any deviation from stready state equilibrium. The results also confirm a bi-directional causality among all variables except Fintech, policy uncertainty, and CCE. This study offers relevant policy recommendations.

Determinants of consumption-based and production-based carbon emissions

Determinants of consumption-based and production-based carbon emissions

Analyzing the impacts of renewable energy, patents, and trade on carbon emissions-evidence from the novel method of MMQR.

Achieving sustainable development necessitates proactive measures to mitigate the economy's negative impact on environmental standards. A new empirical association between renewable energy patent innovation and net international trade on carbon emissions in ASEAN countries from 1990 to 2021 is presented, along with its significance. Using present panel data techniques, this study investigates the connections between these factors. Second-generation cointegration and unit root tests, as well as a novel method of Moments Quantile Regression, are used in the econometric procedure. Compared to standard quantile regression, this method is more resistant to outliers and provides an asymmetric relationship between the variables. The findings show that trade increases carbon emissions in countries with medium to high emissions, that patent innovation contributes to increasing emissions, and that renewable energy mitigates carbon emissions in countries with low to medium emerging economies. Our results are consistent with other specifications, including quantile regression canay (Canay 2011), fully modified, dynamic, and fixed effect regressions, proving the EKC hypothesis. These countries need to prioritize greener products and adopt advanced manufacturing technologies to reduce carbon emissions from consumption. However, as prosperity increases, it also leads to higher consumption-based carbon emissions, worsening ecological damage in the region. Implementing policies like trade synchronization and increasing investment in patent innovations are proposed in this study to lower the current level of carbon emissions.

Development of an interactive multi-region enviro-economic equilibrium (IMR3E) model for managing inner- and inter-region carbon-emission mitigation

Under the multiple pressures of climate change, carbon mitigation and economic development, systematically studying the compound effects of economic and environmental policies on the system is desired. An interactive multi-region enviro-economic equilibrium (IMR3E) model is developed to i) explore various carbon-mitigation effects (and their interactions) under multiple policy alternatives (in terms of carbon, income and production taxes) and their combinations. ii) characterize interactions among sectoral activities of multiple provinces, as well as their inner- and inter-region social-economic and environmental (SEE) effects. It is discovered that about 20 % of the carbon emission of the Yangtze River Economic Belt is to meet the final demands in other provinces (mainly in Guangdong and Beijing) outside the YREB. The power generation sector and the non-metallic mineral products industry (including the cement industry) are the main sources of external carbon emissions. Moreover, the composite effects of the implementation of different enviro-economic policies in YREB will be amplified along with the supply chain, and are reflected in the impact on carbon emissions of different provinces. The adjustment of YREB's production tax and carbon tax will have a certain impact on the indirect emission intensity of other provinces, while the income tax will not. For system symbiosis (i.e., an ecological indicator that reflects the fitness of the entire system), adjusting production tax is the most important factor, and a lower production tax level is the most beneficial. Regarding the consumption-based carbon emission intensity of other provinces, carbon tax policy has the greatest impact, with a contribution rate of over 95 %. Moreover, the interaction of carbon tax and production tax should be fully valued when adjusting the industrial structure.

Can sustainable resource management overcome geopolitical risk?

Sustainable development is a serious concern for policymakers and researchers worldwide, as it requires the management of economic growth, social progress, and environmental protection. In this context, our study examines the influence of geopolitical risks, natural resource rent, and key economic factors on consumption-based carbon emissions within the G-7 countries. Based on panel data spanning from 1990 to 2020, our findings indicate a direct positive relationship between geopolitical uncertainties and carbon emissions, leading to heightened environmental damage. In contrast, revenues from natural resources show an inverse connection with emissions. Additionally, while higher imports and GDP escalate emissions, exports tend to mitigate carbon emissions. The current study contributes to the literature by highlighting the importance of promoting stable political environments and sustainable resource management practices to reduce carbon emissions and ensure resource efficiency for sustainable development in G-7 economies. These findings suggest that policymakers should prioritize environmentally friendly policies and encourage sustainable resource use to achieve sustainable development.

Do environmental taxes, environmental innovation, and energy resources matter for environmental sustainability: Evidence of five sustainable economies

This study explores the relationship between environmental taxation, environmental technologies, energy resources, and consumption-based carbon emissions in five leading green economies from 2000 to 2019. The study applied the Cross-Sectional Auto-Regressive Distributed Lag (CS-ARDL) model to derive benchmark results, with Augmented Mean Group (AMG) and Common Correlated Effect Mean Group (CCEMG) techniques being utilized for conducting robustness analyses. The empirical findings suggest that environmental taxation, environmental innovations, and the consumption of renewable energy are associated with a reduction in consumption-based carbon emissions, thereby contributing to enhanced environmental sustainability. Conversely, the utilization of non-renewable energy is linked to an increase in consumption-based carbon emissions. These results align with the objectives outlined in the Sustainable Development Goals' 2030 agenda, particularly SDG 7 (Affordable and Clean Energy), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 13 (Climate Action), offering valuable policy implications.

Towards BitCO2, an individual consumption-based carbon emission reduction mechanism

Human activities, such as burning fossil fuels for electricity generation, heating, and transport, are the primary drivers of a large amount of greenhouse gases emission. The individual consumers, able to influence the supply-chains behind the commodities their chose to fulfil their needs is the driver behind production and, consequently, its impacts. Thus, the active and willing participation of citizens in combatting climate change may be pivotal to address this issue. The present work is aimed at presenting and modelling a novel market-based carbon emission reduction mechanism, called BitCO2, designed to incentivize individual consumption choices toward lower carbon footprints. This mechanism is tested for the Italian private transportation sector thanks to an ad hoc developed System Dynamics model. The Battery Electric Vehicle (BEV) adoption, if compared with the Internal Combustion Engine Vehicle (ICEV) one, cause less CO2 emissions per km travelled. After a certain number of travelled km, a BitCO2 token is assigned to BEV owners for each ton of avoided CO2. This token can be exchanged in a dedicated market and used to get a discount on insurance services. Assuming a Social Cost of Carbon of 9.22 [2.13–22.3] €/tonCO2eq, model results show that the BitCO2 mechanism would allow for a cumulated CO2 emission reduction of 973 [68.9–5’230] ktonCO2eq over 20 years of operation with a peak of 39.3 [5.34–189] thousand additional BEV registration per year.

The effects of carbon-related news on carbon emissions and carbon transfer from a global perspective: Evidence from an extended STIRPAT model

Climate change poses an enormous challenge to countries across the world. News is a crucial channel to draw society's attention to this issue and strengthen climate governance initiatives, such as carbon emission reduction. The aim of this research was to investigate the effects of carbon-related news on carbon emissions and carbon transfer. First, we analyzed the topics of carbon-related news from media outlets such as ABC, CNN, and The Guardian from 2009 to 2019. Then, we calculated the carbon emissions from both production- and consumption-based perspectives and constructed the carbon transfer network of major countries around the world. Finally, we examined the direct and lag effects of carbon-related news attention and contents on carbon emissions and carbon transfer by using the extended population, affluence, and technology (STIRPAT) model as the analytical framework. The results showed the following. First, countries are paying increasing attention to carbon-related issues with the rise of global carbon emissions, and they mainly focus on the social aspects of carbon emissions. Second, there are differences in production- and consumption-based carbon emissions by country. The amount of embodied carbon transfer between countries has increased over time and the carbon transfer network has become tighter. Finally, carbon-related news has a positive impact on improving carbon emissions and carbon transfer worldwide. Different news topics have also shown varying effects on carbon emissions and carbon transfer. In summary, this study further revealed the impacts of carbon-related news on carbon emissions and transfer and accordingly provided policy implications in carbon emission reduction for the government.

Does nuclear energy reduce consumption-based carbon emissions: The role of environmental taxes and trade globalization in highest carbon emitting countries

This research examined consumption-based carbon emission reduction by nuclear energy consumption and environmental tax while considering the context of trade globalization in the highest five emitter nations from 1990 to 2020. This study used various empirical methodologies, including preliminary analysis to check the stationarity and cointegration, the CS-ARDL for long-run analysis, CCEMG, AMG for robustness, and the D-H causality test for short-term pairwise causation. The results indicated that nuclear energy consumption, environmental tax, and trade globalization help to mitigate consumption-based carbon emissions while economic growth and population density boost carbon emissions. Furthermore, the results also found two-way casual connection exists between nuclear energy consumption, population density, and consumption-based carbon emissions. Thus, the results emphasize the need for government policies that encourage nuclear energy and environmental tax as a strategy to reduce carbon emissions and achieve and maintain environmental development.

Structural Characteristics of the Household Carbon Footprint in an Aging Society

The aging population has posed a challenge to China’s carbon neutrality pledge. To study the household carbon footprint in an aging society, this paper has combined the age-specific consumption pattern and environmental input-output life cycle assessment (EIO-LCA) to calculate the carbon footprint of household consumption across age groups, and then identified the key pathways of carbon emissions via structural path analysis (SPA). Results indicate that the elderly contribute 11.65% to total consumption-based carbon emissions. The working group (ages 15–64) has the highest average carbon footprint (0.85 tCO2e), while the elderly group (ages 65 and above) has the lowest average carbon footprint (0.82 tCO2e). Urban households of all ages have a higher carbon footprint than rural households. Housing and food are the dominant sources of the elderly carbon footprint. Notably, the production and distribution of electric power and heat power sector associated with housing energy consumption plays a leading role in the carbon emissions pathways of elderly consumption. Measuring the carbon footprint of older people can support policy designs and decision making in key sectors along the supply chain, and further encourage low-carbon lifestyles among China’s elderly. Additionally, the findings of this study have broad applications, especially for developing countries undergoing demographic transitions.

Understanding the Role of Energy Productivity, Eco-Innovation and International Trade in Shaping Consumption-Based Carbon Emissions: A Study of BRICS Nations.

In recent years, addressing the issue of carbon emissions has gained significant attention in the field of environmental sustainability. This study aims to contribute to the existing literature by investigating the interplay between eco-innovation, international trade, energy productivity, and consumption-based carbon emissions in the context of the BRICS economies. Using data spanning the period from 1990 to 2020, we employ advanced methodological techniques to overcome challenges associated with cross-section dependency, non-stationarity, and heterogeneity. The results of our study provide compelling evidence of a long-term cointegrating association between eco-innovation, energy productivity, economic growth, imports, exports and consumption-based carbon emissions. The results reveal that eco-innovations, exports, and energy productivity are associated with reductions in CO2 emissions. Conversely, imports and GDP growth contribute to higher CO2 emissions. Our findings have significant implications for policymakers, businesses, and stakeholders involved in shaping environmental policies and sustainable development strategies. The observed negative correlations between eco-innovation, exports, energy productivity, and consumption-based carbon emissions offer a clear channel for mitigating environmental pollution. By prioritizing and promoting eco-innovation initiatives, encouraging sustainable exports, and enhancing energy productivity, policymakers can effectively reduce carbon emissions and foster sustainable economic growth.

Green finance and clean taxes are the ways to curb carbon emissions: An OECD experience

The rising carbon dioxide emissions pose a significant threat to environmental sustainability. The attention, once primarily on production-based emissions, has recently shifted towards consumption-based carbon (CCO2) emissions. While much of the existing literature focuses on production-based impacts, the interplay between green finance, environmental taxes, and CCO2 emissions is yet to be comprehensively explored. To address this knowledge gap, our study investigates the dynamics of these variables across 21 OECD economies from 1990 to 2020, also considering trade activities and economic growth. We employ the second-generation unit root test and methodologies to manage cross-sectional dependence and slope heterogeneity, establishing cointegration among the variables of interest. Applying an innovative quantile regression method adapted for non-normal data distribution, our results highlight economic growth and imports as major drivers of CCO2 emissions, with exports, green finance, and environmental taxes serving as substantial mitigating forces. This pattern remains consistent across all quantiles. Our analysis reveals a unidirectional influence of trade on CCO2 emissions, with bidirectional causality observed between economic growth, green finance, environmental taxes, and CCO2 emissions. In light of our findings, we recommend fostering green finance and levying environmental taxes in industries with high pollution output as key strategies for advancing environmental sustainability.

The effects of trade, renewable energy, and financial development on consumption-based carbon emissions (comparative policy analysis for the G20 and European Union countries).

Recently, there has been a lot of focus on global trade and consumption-based carbon (CCO2) emissions. More research, however, has examined how financial development (FD) and international trade in renewable energy affect CO2 emissions. Furthermore, there are no distinct trends in the research about how globalization affects environmental quality. Our research analyzes and empirically investigates the relationship between CCO2 emissions and renewable energy, FD, and trade. A large panel of data from 41 G20 and European Union (EU) countries is assembled for empirical analysis from 1990 to 2019. The practical outcomes of panel quantile regression and feasible generalized least square (FGLS) approaches display that renewable energy and FD positively relate to CCO2 emissions; furthermore, trade to GDP hurts CCO2 emissions; market classification has been taken as a control variable which shows that the developed countries released more carbon than non-developed countries. These results suggest that the financial sector focuses more on supporting companies that use ecologically friendly techniques and pushing them to use other energy well-organized technologies in their production processes. As a result, CCO2 emissions will be reduced, preventing environmental damage at the non-renewable energy plant.