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Carbon emissions, environmental distortions, and impact on growth

Author

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  • Choudhury, Tonmoy
  • Kayani, Umar Nawaz
  • Gul, Azeem
  • Haider, Syed Arslan
  • Ahmad, Sareer
Abstract
The climate changes over the past few decades are a significant threat to the future of humanity. In this regard, in current years, consumption-based carbon emanations have dominated research on environmental issues and international trade. This study examines how carbon emission influences the economic growth of the top five polluted economies of the world. To get an estimate on an empirical level, the study uses a Panel Autoregressive Distributed Lag (PARDL) approach. After a shock, the system shifts towards a long-run equilibrium, as the estimated results show that the ECM value is negative and significant. Empirics show that energy consumption and GDP are positively and significantly associated with CO2 emissions in both the long and short run. In addition, the GDP2 effect indicates the Kuznets curve (EKC) effect in the top five polluted countries. Industrial production is positively linked with CO2 emissions in the short term but negatively correlated and statistically insignificant in a long time. Finally, it is recommended that policymakers focus on reducing pollution, especially in high‑carbon emissions, and in other countries, countries that prerequisite to cutting the use of coal and oil energy could help reduce CO2 emissions to protect the environment. In addition, these countries must switch to using clean energy such as natural gas.

Suggested Citation

  • Choudhury, Tonmoy & Kayani, Umar Nawaz & Gul, Azeem & Haider, Syed Arslan & Ahmad, Sareer, 2023. "Carbon emissions, environmental distortions, and impact on growth," Energy Economics, Elsevier, vol. 126(C).
    • Handle: RePEc:eee:eneeco:v:126:y:2023:i:c:s0140988323005388
    DOI: 10.1016/j.eneco.2023.107040
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    More about this item

    Keywords

    Environmental degradation; Kuznets curve; Panel autoregressive distributed lag; Climatic change; Carbon emission;
    All these keywords.

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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