Abstract
The impact of consumption of renewable energy on CO2 emissions was investigated, in five MERCOSUR’s countries from 1980 to 2014. The autoregressive distributed lag (ARDL) in the form of Unrestricted Error Correction Model to decompose the total effect of variables into it is the short- and long-run components. The results of preliminary tests showed the presence of cross-sectional dependence between the variables, the stationarity of all variables in the first differences, and the homogeneity in panel data. Moreover, the specification tests pointed to the presence of cross-sectional dependence, non-correlation between the crosses, serial correlation in the panel data model, and the existence of heteroskedasticity. The results of semi-elasticities (short run) and elasticities (long run) of ARDL model pointed that the economic growth and consumption of fossil fuels increase the CO2 emissions in the short and long run, while the consumption of renewable energy reduces them. Despite the consumption of renewable energy reducing the environmental degradation in the MERCOSUR countries, its impact is small. Finally, this study proved that the consumption of renewable energy is able to reduce the CO2 emissions, which is responsible for the environmental degradation in the MERCOSUR countries, and that the economic growth of these same countries increases the CO2 emissions, along with the fact that all MERCOSUR countries are highly dependent of fossil fuels.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Aliprandi F, Stoppato A, Mirandola A (2016) Estimating CO2 emissions reduction from renewable energy use in Italy. Renew Energy 96:220–231. https://doi.org/10.1016/j.renene.2016.04.022
Al-Mulali U, Tang CF, Ozturk I (2015) Estimating the environment Kuznets curve hypothesis: evidence from Latin America and the Caribbean countries. Renew Sustain Energy Rev 50:918–924. https://doi.org/10.1016/j.rser.2015.05.017
Alvarez-Herranz A, Balsalobre-Lorente D, Shahbaz M, Cantos JM (2017) Energy innovation and renewable energy consumption in the correction of air pollution levels. Energy Policy 105:386–397. https://doi.org/10.1016/j.enpol.2017.03.009
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. https://doi.org/10.1016/j.ecolecon.2010.06.014
Bélaïd F, Youssef M (2017) Environmental degradation, renewable and non-renewable electricity consumption, and economic growth: assessing the evidence from Algeria. Energy Policy 102:277–287. https://doi.org/10.1016/j.enpol.2016.12.012
Bilgili F, Koçak E, Bulut U (2016) The dynamic impact of renewable energy consumption on CO2 emissions: a revisited Environmental Kuznets Curve approach. Renew Sustain Energy Rev 54:838–845. https://doi.org/10.1016/j.rser.2015.10.080
Boden TA, Marland G, Andres RJ (2011) Global, regional, and national fossil-fuel CO2 emissions. Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory, U.S. Department of Energy, Oak Ridge, TN, USA. https://doi.org/10.3334/cdiac/00001_v2011
Breusch TS, Pagan AR (1980) The Lagrange multiplier test and its applications to model specification in econometrics. Rev Econ Stud 47(1):239–253
Budzianowski WM, Postawa K (2017) Renewable energy from biogas with reduced carbon dioxide footprint: implications of applying different plant configurations and operating pressures. Renew Sustain Energy Rev 68(2):852–868. https://doi.org/10.1016/j.rser.2016.05.076
Charfeddine L (2017) The impact of energy consumption and economic development on ecological footprint and CO2 emissions: evidence from a Markov switching equilibrium correction model. Energy Econ 65:355–374. https://doi.org/10.1016/j.eneco.2017.05.009
Danish, Zhang B, Wang B, Wang Z (2017) Role of renewable energy and non-renewable energy consumption on EKC: evidence from Pakistan. J Clean Prod 156(10):855–864. https://doi.org/10.1016/j.jclepro.2017.03.203
Dogan E, Ozturk I (2017) The influence of renewable and non-renewable energy consumption and real income on CO2 emissions in the USA: evidence from structural break tests. Environ Sci Pollut Res 24(1):10846–10854. https://doi.org/10.1007/s11356-017-8786-y
Friedman M (1937) The use of ranks to avoid the assumption of normality implicit in the analysis of variance. J Am Stat Assoc 32:675–701
Fuinhas JA, Marques AC, Koengkan M (2017) Are renewable energy policies upsetting carbon dioxide emissions? The case of Latin America countries. Environ Sci Pollut Res 24(17):15044–15054. https://doi.org/10.1007/s11356-017-9109-z
Gill AR, Viswanathan KK, Hassan SA (2017) test of environmental Kuznets curve (EKC) for carbon emission and potential of renewable energy to reduce green houses gases (GHG) in Malaysia. Environ Dev Sustain. https://doi.org/10.1007/s10668-017-9929-5
Greene W (2002) Econometric analysis. Prentice-Hall, Upper Saddle River
Guillén AR (2011) The effects of the global economic crisis in Latin America. Revista de Economia Política 31(2):1–16. https://doi.org/10.1590/S0101-31572011000200001
IRENA (International Renewable Energy Agency) (2016) Renewable energy market analysis: Latin America, pp 1–160. ISBN 978-92-95111-49-3
Ito K (2017) CO2 emissions, renewable and non-renewable energy consumption, and economic growth: evidence from panel data for developing countries. Int Econ 151:1–6. https://doi.org/10.1016/j.inteco.2017.02.001
Jaforullah M, King A (2015) Does the use of renewable energy sources mitigate CO2 emissions? A reassessment of the US evidence. Energy Econ 49:711–717. https://doi.org/10.1016/j.eneco.2015.04.006
Kais S, Mounir BM (2017) Causal interactions between environmental degradation, renewable energy, nuclear energy and real GDP: a dynamic panel data approach. Environ Syst Decis 37(1):51–67. https://doi.org/10.1007/s10669-016-9619-0
Koengkan M (2017a) Is the globalization influencing the primary energy consumption? The case of Latin America and Caribbean countries. Cadernos UniFOA, Volta Redonda 12(33):59–69
Koengkan M (2017b) O nexo entre o consumo de energia primária e o crescimento econômico nos países da América do Sul: Uma análise de longo prazo. Cadernos UniFOA Volta Redonda 12(34):56–66
Liu X, Zhang S, Bae J (2017) The impact of renewable energy and agriculture on carbon dioxide emissions: investigating the environmental Kuznets curve in four selected ASEAN countries. J Clean Prod 164(15):1239–1247. https://doi.org/10.1016/j.jclepro.2017.07.086
Maddala GS, Wu SA (1999) Comparative study of unit root test with panel data a new simple test. Oxford Bull Econ Stat 61(1):631–652
Menyah K, Wolde-Rufael Y (2010) CO2 emissions, nuclear energy, renewable energy and economic growth in the US. Energy Policy 38(6):2911–2915. https://doi.org/10.1016/j.enpol.2010.01.024
Mishkin FS (1999) Lessons from the Tequila Crisis. J Bank Finance 23:1521–1533
Neto TE (2011) As possibilidades e os limites do “realismo periférico”: a política externa do Paraguai de 1954 a 1989. Encontro Nacional ABRI 3:1–16
Omer AM (2002) Energy supply potentials and needs, and the environmental impact of their use in Sudan. Environmentalist 22(4):353–365
Omri A, Nguyen DK, Rault C (2014) Causal interactions between CO2 emissions, FDI, and economic growth: evidence from dynamic simultaneous-equation models. Econ Model 42:382–389. https://doi.org/10.1016/j.econmod.2014.07.026
Özbugday FC, Erbas BC (2015) How effective are energy efficiency and renewable energy in curbing CO2 emissions in the long run? A heterogeneous panel data analysis. Energy 82(15):734–745. https://doi.org/10.1016/j.energy.2015.01.084
Pablo-Romero MD, Jésus JD (2016) Economic growth, and energy consumption: the Energy-Environmental Kuznets Curve for Latin America and the Caribbean. Renew Sustain Energy Rev 60:1343–1350. https://doi.org/10.1016/j.rser.2016.03.029
Pao H-T, Tsai C-M (2011) Multivariate Granger causality between CO2 emissions, energy consumption, FDI (foreign direct investment) and GDP (gross domestic product): evidence from a panel of BRIC (Brazil, Russian Federation, India, and China) countries. Energy 36(1):685–693. https://doi.org/10.1016/j.energy.2010.09.041
Paramati SR, Alam MdS, Chen C-F (2017a) The effects of tourism on economic growth and CO2 emissions: a comparison between developed and developing economies. J Travel Res 56(6):712–724. https://doi.org/10.1177/0047287516667848
Paramati SR, Sinha A, Dogan E (2017b) The significance of renewable energy use for economic output and environmental protection: evidence from the next 11 developing economies. Environ Sci Pollut Res 24(15):13546–13560. https://doi.org/10.1007/s11356-017-8985-6
Pesaran MH (2004) General diagnostic tests for cross section dependence in panels. University of Cambridge, Faculty of Economics. Cambridge Working Papers in Economics, no. 0435
Pesaran MH, Shin Y, Smith RP (1999) Pooled mean group estimation of dynamic heterogeneous panels. J Am Stat Assoc 94(446):621–634
Qi T, Zhang X, Karplus VJ (2014) The energy and CO2 emissions impact of renewable energy development in China. Energy Policy 64:60–69. https://doi.org/10.1016/j.enpol.2013.12.035
Robalino-López A, Mena-Nieto A, García-Ramos JE, Golpe AA (2015) Studying the relationship between economic growth, CO2 emissions, and the environmental Kuznets curve in Venezuela (1980–2025). Renew Sustain Energy Rev 41:602–614. https://doi.org/10.1016/j.rser.2014.08.081
Saidi K, Hammami S (2015) The impact of CO2 emissions and economic growth in energy consumption in 58 countries. Energy Rep 1:62–70. https://doi.org/10.1016/j.egyr.2015.01.003
Schipper L, Deakin E, McAndrew C (2011) Carbon dioxide emissions from urban road transport in Latin America: CO2 reduction as a benefit of transport strategies. Transport moving to climate intelligence, part of the series transportation research, Economic Policy, pp 111–127
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. https://doi.org/10.1016/j.enpol.2013.10.064
Shahbaz M, Tiwari AK, Nasir M (2013a) The effects of financial development, economic growth, coal consumption, and trade openness on CO2 emissions in South Africa. Energy Policy 61:1452–1459. https://doi.org/10.1016/j.enpol.2013.07.006
Shahbaz M, Hye QMA, Tiwari AK, Leitão NC (2013b) Economic growth, energy consumption, financial development, international trade and CO2 emissions in Indonesia. Renew Sustain Energy Rev 25:109–121. https://doi.org/10.1016/j.rser.2013.04.009
Shahzard SJH, Kumar RR, Zakaria M, Hurr M (2017) Carbon emission, energy consumption, trade openness and financial development in Pakistan: a revisit. Renew Sustain Energy Rev 70:185–192. https://doi.org/10.1016/j.rser.2016.11.042
Vergara W, Rios RR, Galindo LM (2013) The climate and development challenge for Latin America and the Caribbean: options for climate resilient, a low-carbon development no. 978-1-59782-165-0 (IADB)
Wesseh PH, Lin B (2016) Can African countries efficiently build their economies on renewable energy? Renew Sustain Energy Rev 54:161–173. https://doi.org/10.1016/j.rser.2015.09.082
Westerlund J (2007) Testing for error correction in panel data. Oxf Econ Stat 31(2):217–224
Wooldridge JM (2002) Econometric analysis of cross section and panel data. The MIT Press, Cambridge
Zoundi Z (2017) CO2 emissions, renewable energy, and the Environmental Kuznets Curve, a panel cointegration approach. Renew Sustain Energy Rev 72:1067–1075. https://doi.org/10.1016/j.rser.2016.10.018
Author information
Authors and Affiliations
Corresponding author
Appendix
Rights and permissions
About this article
Cite this article
Koengkan, M. The decline of environmental degradation by renewable energy consumption in the MERCOSUR countries: an approach with ARDL modeling. Environ Syst Decis 38, 415–425 (2018). https://doi.org/10.1007/s10669-018-9671-z
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10669-018-9671-z