Abstract
This study uses a comparative approach for comparing the nexus of economic growth, renewable and nonrenewable energy consumption, urbanization, trade, and CO2 emissions for South and East Asian countries from 2000 to 2018. The short- and long-run connections between the variables are explored using the dynamic common correlated effects (DCCE) CS-ARDL approach, and the causal linkages are assessed using the Dumitrescu-Hurlin (DH) panel causality test. The data show that the factors have long-term relationships. The findings show that nonrenewable energy consumption and economic growth increase long-term CO2 emissions in South Asia, but trade and use of renewable energy consumption reduce CO2 emissions in the short term. Long-term causal relationships between CO2 emissions, renewable energy use, economic growth, and trade are also revealed by the South Asian causality test. In East Asia, economic growth, NREC, trade, and urbanization increased CO2 emissions in the short and long run, while REC appears to reduce CO2 emissions. According to the causality analysis, long-run bidirectional causation exists between CO2 emissions, renewable energy use, economic growth, and trade. Furthermore, policy suggestions may be made, such as using renewable energy sources to lessen CO2 emissions and improving education and corruption to forecast economic growth in the examined areas.
Similar content being viewed by others
Data availability
All the data is obtained through an online database system; the links are mentioned in the references section.
References
Abbass K, Qasim MZ, Song H, Murshed M, Mahmood H, Younis I (2022) A review of the global climate change impacts, adaptation, and sustainable mitigation measures. Environ Sci Pollut Res 1–21
Adams S, Klobodu EKM, Apio A (2018) Renewable and non-renewable energy, regime type and economic growth. Ren Energy 125:755–767
Adams S, Nsiah C (2019) Reducing carbon dioxide emissions; does renewable energy matter? Sci Total Environ 693:133288
Ahmed Z, Wang Z, Ali S (2019) Investigating the non-linear relationship between urbanization and CO2 emissions: an empirical analysis. Air Qual Atmos Health 12(8):945–953
Al-Mulali U, Sheau-Ting L, Ozturk I (2015) The global move toward Internet shopping and its influence on pollution: an empirical analysis. Environ Sci Pollut Res 22(13):9717–9727
Alam MJ, Begum IA, Buysse J, Van Huylenbroeck G (2012) Energy consumption, carbon emissions and economic growth nexus in Bangladesh: cointegration and dynamic causality analysis. Energy Policy 45:217–225
Amin N, Song H, Farrukh MU (2022) Does sectoral modernization promote CO2 emissions? Dynamic panel analysis of selected Asian countries. Environ Sci Pollut Res 1–12
Apergis N, Payne JE, Menyah K, Wolde-Rufael Y (2010) On the causal dynamics between emissions, nuclear energy, renewable energy, and economic growth. Ecol Econ 69(11):2255–2260
Balsalobre-Lorente D, Shahbaz M, Roubaud D, Farhani S (2018) How economic growth, renewable electricity and natural resources contribute to CO2 emissions? Energy Policy 113:356–367
Baltagi BH, Li D (2002) Series estimation of partially linear panel data models with fixed effects. Ann Econ Finance 3(1):103–116
Behera SR, Dash DP (2017) The effect of urbanization, energy consumption, and foreign direct investment on the carbon dioxide emission in the SSEA (South and Southeast Asian) region. Renew Sustain Energy Rev 70:96–106
Bekun FV, Alola AA, Sarkodie SA (2019) Toward a sustainable environment: nexus between CO2 emissions, resource rent, renewable and nonrenewable energy in 16-EU countries. Sci Total Environ 657:1023–1029
Belaïd F, Zrelli MH (2019) Renewable and non-renewable electricity consumption, environmental degradation and economic development: evidence from Mediterranean countries. Energy Policy 133:110929
Ben Jebli M, Ben Youssef S, Apergis N (2019) The dynamic linkage between renewable energy, tourism, CO2 emissions, economic growth, foreign direct investment, and trade. Lat Am Econ Rev 28(1):1–19. https://doi.org/10.1186/s40503-019-0063-7
Ben Mbarek M, Saidi K, Rahman MM (2018) Renewable and non-renewable energy consumption, environmental degradation and economic growth in Tunisia. Qual Quant 52(3):1105–1119
Bento JPC, Moutinho V (2016) CO2 emissions, non-renewable and renewable electricity production, economic growth, and international trade in Italy. Renew Sustain Energy Rev 55:142–155
Bhat JA (2018) Renewable and non-renewable energy consumption—impact on economic growth and CO2 emissions in five emerging market economies. Environ Sci Pollut Res 25(35):35515–35530
Bhattacharya M, Churchill SA, Paramati SR (2017) The dynamic impact of renewable energy and institutions on economic output and CO2 emissions across regions. Renew Energy 111:157–167
Blackburne Iii EF, Frank MW (2007) Estimation of nonstationary heterogeneous panels. Stand Genomic Sci 7(2):197–208
Bölük G, Mert M (2015) The renewable energy, growth and environmental Kuznets curve in Turkey: an ARDL approach. Renew Sustain Energy Rev 52:587–595
Breusch TS, Pagan AR (1980) The Lagrange multiplier test and its applications to model specification in econometrics. Rev Econ Stud 47(1):239–253
Chaudhuri S, Pfaff A (2002) Economic growth and the environment: what can we learn from household data. Columbia University
Chen Y, Zhao J, Lai Z, Wang Z, Xia H (2019) Exploring the effects of economic growth, and renewable and non-renewable energy consumption on China’s CO2 emissions: Evidence from a regional panel analysis. Renew Energy 140:341–353
Chudik A, Mohaddes K, Pesaran MH, Raissi M (2016) Long-run effects in large heterogeneous panel data models with cross-sectionally correlated errors. In Essays in Honor of Aman Ullah: Emerald Group Publishing Limited
Chudik A, Pesaran MH (2015) Common correlated effects estimation of heterogeneous dynamic panel data models with weakly exogenous regressors. J Econom 188(2):393–420
Cole MA, Neumayer E (2004) Examining the impact of demographic factors on air pollution. Popul Environ 26(1):5–21
De Hoyos RE, Sarafidis V (2006) Testing for cross-sectional dependence in panel-data models. Stand Genomic Sci 6(4):482–496
Ditzen J (2016) xtdcce: Estimating dynamic common correlated effects in Stata. The Spatial Economics and Econometrics Centre (SEEC), 1601
Dogan E, Seker F (2016) The influence of real output, renewable and non-renewable energy, trade and financial development on carbon emissions in the top renewable energy countries. Renew Sustain Energy Rev 60:1074–1085
Dogan E, Seker F, Bulbul S (2017) Investigating the impacts of energy consumption, real GDP, tourism and trade on CO2 emissions by accounting for cross-sectional dependence: a panel study of OECD countries. Curr Issue Tour 20(16):1701–1719
Dong K, Dong X, Dong C (2019) Determinants of the global and regional CO2 emissions: what causes what and where? Appl Econ 51(46):5031–5044
Du L, Jiang H, Adebayo TS, Awosusi AA, Razzaq A (2022) Asymmetric effects of high-tech industry and renewable energy on consumption-based carbon emissions in MENA countries. Renew Energy
Dumitrescu E-I, Hurlin C (2012) Testing for Granger non-causality in heterogeneous panels. Econ Model 29(4):1450–1460
Fan Y, Liu L-C, Wu G, Wei Y-M (2006) Analyzing impact factors of CO2 emissions using the STIRPAT model. Environ Impact Assess Rev 26(4):377–395
Farhani S (2013) Renewable energy consumption, economic growth and CO2 emissions: Evidence from selected MENA countries. Energy Econ Lett 1(2):24–41
Farhani S, Shahbaz M (2014) What role of renewable and non-renewable electricity consumption and output is needed to initially mitigate CO2 emissions in MENA region? Renew Sustain Energy Rev 40:80–90
Frees EW (1995) Assessing cross-sectional correlation in panel data. J Econom 69(2):393–414
Friedman M (1937) The use of ranks to avoid the assumption of normality implicit in the analysis of variance. J Am Stat Assoc 32(200):675–701
Gasimli O, Haq IU, Gamage SKN, Shihadeh F, Rajapakshe PSK, Shafiq M (2019) Energy, trade, urbanization and environmental degradation nexus in Sri Lanka: bounds testing approach. Energies 12(9):1655
Gielen D, Boshell F, Saygin D, Bazilian MD, Wagner N, Gorini R (2019) The role of renewable energy in the global energy transformation. Energ Strat Rev 24:38–50
Granger CWJ (1969) Investigating causal relations by econometric models and cross-spectral methods. Econometrica: J Econom Soc 424–438
Grossman GM, Krueger AB (1995) Economic growth and the environment. Q J Econ 110(2):353–377
Halicioglu F (2009) An econometric study of CO2 emissions, energy consumption, income and foreign trade in Turkey. Energy Policy 37(3):1156–1164
Hasanov FJ, Liddle B, Mikayilov JI (2018) The impact of international trade on CO2 emissions in oil exporting countries: territory vs consumption emissions accounting. Energy Econ 74:343–350
Haug AA, Ucal M (2019) The role of trade and FDI for CO2 emissions in Turkey: Nonlinear relationships. Energy Econ 81:297–307
Helpman E (1998) Explaining the structure of foreign trade: Where do we stand? Weltwirtschaftliches Archiv 134(4):573–589
Hossain MS (2011) Panel estimation for CO2 emissions, energy consumption, economic growth, trade openness and urbanization of newly industrialized countries. Energy Policy 39(11):6991–6999
Iea GE (2019) CO2 Status Report 2018. International Energy Agency, Paris, p 562
Inglesi-Lotz R, Dogan E (2018) The role of renewable versus non-renewable energy to the level of CO2 emissions a panel analysis of sub-Saharan Africa’s Βig 10 electricity generators. Renew Energy 123:36–43
Jebli MB, Youssef SB (2015) The environmental Kuznets curve, economic growth, renewable and non-renewable energy, and trade in Tunisia. Renew Sustain Energy Rev 47:173–185
Kao C (1999) Spurious regression and residual-based tests for cointegration in panel data. J Econom 90(1):1–44
Kashem MA, Rahman MM (2019) CO2 emissions and development indicators: a causality analysis for Bangladesh. Environ Processes 6(2):433–455
Kasman A, Duman YS (2015) CO2 emissions, economic growth, energy consumption, trade and urbanization in new EU member and candidate countries: a panel data analysis. Econ Model 44:97–103
Khoshnevis Yazdi S, Golestani Dariani A (2019) CO 2 emissions, urbanisation and economic growth: evidence from Asian countries. Econ Res-Ekonomska Istraživanja 32(1):510–530
Kuo Y, Maneengam A, The CP, An NB, Nassani AA, Haffar M, Qadus A (2022) Fresh evidence on environmental quality measures using natural resources, renewable energy, non-renewable energy and economic growth for 10 Asian nations from CS-ARDL technique. Fuel 320:123914
Lamb WF, Steinberger JK, Bows-Larkin A, Peters GP, Roberts JT, Wood FR (2014) Transitions in pathways of human development and carbon emissions. Environ Res Lett 9(1):014011
Li Y, Alharthi M, Ahmad I, Hanif I, Hassan MU (2022) Nexus between renewable energy, natural resources and carbon emissions under the shadow of transboundary trade relationship from South East Asian economies. Energ Strat Rev 41:100855
Liddle B, Lung S (2010) Age-structure, urbanization, and climate change in developed countries: revisiting STIRPAT for disaggregated population and consumption-related environmental impacts. Popul Environ 31(5):317–343
Maddala GS, Wu S (1999) A comparative study of unit root tests with panel data and a new simple test. Oxford Bull Econ Stat 61(S1):631–652
Martínez-Zarzoso I, Maruotti A (2011) The impact of urbanization on CO2 emissions: evidence from developing countries. Ecol Econ 70(7):1344–1353
Mehmood U, Tariq S (2020) Globalization and CO2 emissions nexus: evidence from the EKC hypothesis in South Asian countries. Environ Sci Pollut Res 27(29):37044–37056
Mongelli I, Tassielli G, Notarnicola B (2006) Global warming agreements, international trade and energy/carbon embodiments: an input–output approach to the Italian case. Energy Policy 34(1):88–100
Murshed M, Abbass K, Rashid S (2021) Modelling renewable energy adoption across south Asian economies: empirical evidence from Bangladesh, India, Pakistan and Sri Lanka. Int J Financ Econ 26(4):5425–5450
Nain MZ, Ahmad W, Kamaiah B (2017) Economic growth, energy consumption and CO2 emissions in India: a disaggregated causal analysis. Int J Sustain Energ 36(8):807–824
NASA (2016) The cost of energy and environmental impact [Online], The National Academies of Sciences, Engineering and Medicine. Retrieved from http://needtoknow.nas.edu/energy/energy-costs/environmental/. Accessed 8 August 2016
Ni X, Wang Z, Akbar A, Ali S (2022) Natural resources volatility, renewable energy, R&D resources and environment: Evidence from selected developed countries. Resour Policy 77:102655
Paramati SR, Mo D, Gupta R (2017) The effects of stock market growth and renewable energy use on CO2 emissions: evidence from G20 countries. Energy Econ 66:360–371
Park Y, Meng F, Baloch MA (2018) The effect of ICT, financial development, growth, and trade openness on CO2 emissions: an empirical analysis. Environ Sci Pollut Res 25(30):30708–30719
Pata UK (2018) Renewable energy consumption, urbanization, financial development, income and CO2 emissions in Turkey: testing EKC hypothesis with structural breaks. J Clean Prod 187:770–779
Pedroni P (2004) Panel cointegration: asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Economet Theor 20(3):597–625
Pesaran MH (1997) The role of economic theory in modelling the long run. Econ J 107(440):178–191
Pesaran MH (2004) General diagnostic tests for cross section dependence in panels. United Kingdom: University of Cambridge
Pesaran MH (2006) Estimation and inference in large heterogeneous panels with a multifactor error structure. Econometrica 74(4):967–1012
Pesaran MH (2007) A simple panel unit root test in the presence of cross-section dependence. J Appl Economet 22(2):265–312
Pesaran MH, Shin Y, Smith RP (1999) Pooled mean group estimation of dynamic heterogeneous panels. J Am Stat Assoc 94(446):621–634
Pesaran MH, Smith R (1995) Estimating long-run relationships from dynamic heterogeneous panels. J Econom 68(1):79–113
Poumanyvong P, Kaneko SJEE (2010) Does urbanization lead to less energy use and lower CO2 emissions? A Cross-Country Analysis 70(2):434–444
Rahman MM (2017) Do population density, economic growth, energy use and exports adversely affect environmental quality in Asian populous countries? Renew Sustain Energy Rev 77:506–514
Rahman MM, Velayutham E (2020) Renewable and non-renewable energy consumption-economic growth nexus: new evidence from South Asia. Renew Energy 147:399–408
Rasoulinezhad E, Saboori B (2018) Panel estimation for renewable and non-renewable energy consumption, economic growth, CO2 emissions, the composite trade intensity, and financial openness of the commonwealth of independent states. Environ Sci Pollut Res 25(18):17354–17370
Reddy BS, Assenza GB (2009) The great climate debate. Energy Policy 37(8):2997–3008
Rogers S (2012) World carbon emissions: the league table of every country. The Guardian 21 June
Sadorsky P (2009) Renewable energy consumption and income in emerging economies. Energy Policy 37(10):4021–4028
Sarkodie SA, Adams S (2018) Renewable energy, nuclear energy, and environmental pollution: accounting for political institutional quality in South Africa. Sci Total Environ 643:1590–1601
Sarkodie SA, Strezov V (2019) A review on environmental Kuznets curve hypothesis using bibliometric and meta-analysis. Sci Total Environ 649:128–145
Schmalensee R, Stoker TM, Judson RA (1998) World carbon dioxide emissions: 1950–2050. Rev Econ Stat 80(1):15–27
Sen S, Ganguly S (2017) Opportunities, barriers and issues with renewable energy development–a discussion. Renew Sustain Energy Rev 69:1170–1181
Shafiei S, Salim RA (2014) Non-renewable and renewable energy consumption and CO2 emissions in OECD countries: a comparative analysis. Energy Policy 66:547–556
Shahbaz M, Hye QMA, Tiwari AK, Leitão NC (2013) Economic growth, energy consumption, financial development, international trade and CO2 emissions in Indonesia. Renew Sustain Energy Rev 25:109–121
Shahbaz M, Lean HH, Shabbir MS (2012) Environmental Kuznets curve hypothesis in Pakistan: cointegration and Granger causality. Renew Sustain Energy Rev 16(5):2947–2953
Shahbaz M, Loganathan N, Muzaffar AT, Ahmed K, Jabran MA (2016) How urbanization affects CO2 emissions in Malaysia? The application of STIRPAT model. Renew Sustain Energy Rev 57:83–93
Shahbaz M, Naeem M, Ahad M, Tahir I (2018) Is natural resource abundance a stimulus for financial development in the USA? Resour Policy 55:223–232
Shahzad U, Kahrobaee S, Asgarpoor S (2017) Protection of distributed generation: challenges and solutions. Energy Power Eng 9(10):614
Sharif A, Raza SA, Ozturk I, Afshan S (2019) The dynamic relationship of renewable and nonrenewable energy consumption with carbon emission: a global study with the application of heterogeneous panel estimations. Renew Energy 133:685–691
Sharma SS (2011) Determinants of carbon dioxide emissions: empirical evidence from 69 countries. Appl Energy 88(1):376–382
Tariq S, Ul-Haq Z, Imran A, Mehmood U, Aslam MU, Mahmood K (2017) CO2 emissions from Pakistan and India and their relationship with economic variables. Appl Ecol Environ Res 15(4):1301–1312
Tiwari AK, Shahbaz M, Hye QMA (2013) The environmental Kuznets curve and the role of coal consumption in India: cointegration and causality analysis in an open economy. Renew Sustain Energy Rev 18:519–527
WDI (2019) World Development Indicators, World Bank, Retrieved from https://data.worldbank.org/indicator/Eg.Fec.Rnew.Zs. Accessed 23 Feb 2019
Westerlund J (2007) Testing for error correction in panel data. Oxford Bull Econ Stat 69(6):709–748
Zhou X, Jia M, Altuntaş M, Kirikkaleli D, Hussain M (2022) Transition to renewable energy and environmental technologies: the role of economic policy uncertainty in top five polluted economies. J Environ Manage 313:115019
Author information
Authors and Affiliations
Contributions
Nabila Amin: complete writing, data analysis, software working, econometric modelling, methodology, mathematical investigation, and reference verification. Huaming Song: supervision and conceptualization.
Corresponding author
Ethics declarations
Ethics approval and consent to participate
Not applicable.
Consent for publication
Not applicable.
Conflict of interest
The authors declare no competing interests.
Additional information
Responsible Editor: Roula Inglesi-Lotz
Publisher's note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Amin, N., Song, H. The role of renewable, non-renewable energy consumption, trade, economic growth, and urbanization in achieving carbon neutrality: A comparative study for South and East Asian countries. Environ Sci Pollut Res 30, 12798–12812 (2023). https://doi.org/10.1007/s11356-022-22973-2
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11356-022-22973-2