Abstract
Global warming and greenhouse gas emissions have become a severe threat to our ecosystem. Prior studies on environment posit that ample exhaustion of fossil fuels for energy is one of the fundamental causes of environmental degradation and naturally replenished energy sources are affordable over fossil fuels. This study set out to examine the role of financial sectors and globalization (in the presence of energy and renewable energy consumption) for a sustainable environment in the panel of Central and Eastern European (CEE) countries in One Belt and One Road initiative perspective. The current study uses annual data of 16 CEE countries covering the period of 1980 to 2016. After confirmation of cross-sectional dependency and co-integration among variables, we applied the Dynamic Seemingly Unrelated Regression and Dumitrescu–Hurlin causality approach for long-run estimations and to check the causal relationship, respectively. The empirical findings of the study certify the existence of an environmental Kuznets curve for the selected panel countries. Globalization is enhancing the environmental quality of the CEE economies. It is important to note that energy consumption and renewable energy consumption have a positive and statistically significant whack on carbon emission. In addition, we do not find a significant link between financial development and carbon emission. Granger casualty test confirms a two-way causal relationship between economic growth and carbon emission, globalization and environmental degradation, globalization and renewable energy consumption, economic growth and renewable energy consumption, and between financial development and energy consumption. Moreover, we found one-way causality from energy consumption (renewable and non-renewable) to carbon emissions. Based on the findings, a number of appropriate policy suggestions are presented in the perspective of Central and Eastern European Countries.
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Notes
A report on Environment “Atmospheric Concentrations of Greenhouse Gases” by United States Environmental Protection Agency (US-EPA 2018).
A report on ‘the major cause of global warming’ by “Time for change.”
The world-wide energy consumption is increasing by 2% per year—American Energy Information Administration (US-EIA 2018).
Time span (1980–2016) and number of countries (16 CEE countries) are selected on the basis of data availability.
“DSUR” is a useful and good predictor; its predictions are better even when T > N (Dogan and Seker 2016).
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This empirical work was financially supported by the National Natural Science Foundation of China under project number NSFC-71672009.71372016.
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Shujah-ur-Rahman, Chen, S., Saud, S. et al. The nexus between financial development, globalization, and environmental degradation: Fresh evidence from Central and Eastern European Countries. Environ Sci Pollut Res 26, 24733–24747 (2019). https://doi.org/10.1007/s11356-019-05714-w
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DOI: https://doi.org/10.1007/s11356-019-05714-w