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Do renewable energy consumption and service industry development contribute to CO2 emissions reduction in BRICS countries?

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Abstract

In recent years, BRICS countries have attached great importance to renewable energy development and actively promoted the shift of economic structure towards service industry, in order to achieve the decoupling of economic development from carbon emissions. However, relevant studies mostly neglect the cross-sectional dependence and heterogeneity issues, which may cause biased results. Therefore, this paper selects the panel data of BRICS countries during 1996–2017 and employs the common correlated effects mean group (CCEMG) method, which are based on the cross-sectional dependence and heterogeneity assumptions, to explore the influence of renewable energy consumption and service industry development on CO2 emissions in BRICS countries. Besides, we also use the random effects model and pooled estimated generalized least squares model, as well as fully modified OLS model for comparison. The results indicate that enhancing the proportion of renewable energy consumption in the total energy consumption is an effective measure to reduce CO2 emissions in BRICS countries. Moreover, the steadily rising contribution of service industry to economic growth in BRICS countries during the sample period does not necessarily contribute to reduce CO2 emissions.

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Notes

  1. https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html

  2. http://news.cnpc.com.cn/system/2014/06/17/001492127.shtml

  3. https://data.worldbank.org/indicator/NV.SRV.TETC.ZS?view=chart

  4. Given the short length and low frequency characters of our panel data, referring to Cowan et al. (2014), we do not specifically look into structural breaks issue that is significantly obvious when the data frequency is high and the time span is long. Besides, so far, there is few mature methods that allow for ross-sectional dependence, heterogeneity, and structural breaks problems to investigate the long-run nexus among variables.

  5. Consider the validity of the data, the time span of our panel data is from 1996 to 2017.

  6. In the process of exploring the impacts of energy structure and economic structure on carbon emissions, in order to avoid serious omitted variables problem, other variables that significantly affect carbon emissions need to be considered. Based on EKC theory, the per capita GDP variable and its squared term are added to the model.

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Funding

The authors received financial support from the National Natural Science Foundation of China (nos. 71774051), the National Program for Support of Top-notch Young Professionals (no. W02070325), Changjiang Scholars Program of the Ministry of Education of China (no. Q2016154), Science Fund for Distinguished Young Scholars of Hunan province (No. 2018JJ1010), and Hunan Youth Talent Program.

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Authors and Affiliations

  1. Business School, Hunan University, Changsha, 410082, China

    Yue-Jun Zhang & Wei Wang

  2. Center for Resource and Environmental Management, Hunan University, Changsha, 410082, China

    Yue-Jun Zhang & Wei Wang

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  1. Yue-Jun Zhang
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  2. Wei Wang
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Correspondence to Yue-Jun Zhang.

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Zhang, YJ., Wang, W. Do renewable energy consumption and service industry development contribute to CO2 emissions reduction in BRICS countries?. Environ Sci Pollut Res 26, 31632–31643 (2019). https://doi.org/10.1007/s11356-019-06330-4

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