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How do trade and economic growth impact environmental degradation? New evidence and policy implications from the ARDL approach

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Abstract

Due to various environmental degradation and natural resource depletion around the world, researchers’ and policymakers’ attention has turned to what causes environmental degradation. The pursuit of a healthy environment has become a global challenge, a problem that affects more than one nation. Climate change is causing severe weather conditions in every world, disrupting economies and affecting the lives of many people. Hence, the study analyzes how trade and economic growth impact environmental degradation in Belgium, the USA, and Canada using panel data from 1995 to 2016. The study utilized the autoregressive distributed lag approach to provide new evidence and policy implications. The outcome confirmed the presence of cointegration among the selected variables. However, it was observed that economic growth decreases environmental degradation in the long run while trade openness shows a positively insignificant relationship with carbon emission. Nevertheless, a positive short-run relationship was observed between economic growth and carbon emissions whereas a negatively insignificant relationship was observed for trade and carbon emission. The findings prompted policy implications that more trading could be done between the countries. When countries trade more, their economies will flourish, ensuring global prosperity and minimizing environmental degradation.

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Authors and Affiliations

  1. Faculty of Economics and Administrative Sciences, Cyprus International University, North Cyprus, Via Mersin, 10, Nicosia, Turkey

    Benjamin Ampomah Asiedu & Bright A. Gyamfi

  2. Department of Accounting and Finance, Valley View University, Ghana, West Africa

    Evans Oteng

Authors
  1. Benjamin Ampomah Asiedu
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  2. Bright A. Gyamfi
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  3. Evans Oteng
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Contributions

BAG wrote the introduction section. BAA wrote the methodology and analyzed and interpreted the data regarding CO2, trade, and GDP. OE provided the topic and supervised the current study at the same time and was a major contributor in writing the manuscript. All authors read and approved the final manuscript.

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Correspondence to Benjamin Ampomah Asiedu.

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Table 8 Definition of variables
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Asiedu, B.A., Gyamfi, B.A. & Oteng, E. How do trade and economic growth impact environmental degradation? New evidence and policy implications from the ARDL approach. Environ Sci Pollut Res 28, 49949–49957 (2021). https://doi.org/10.1007/s11356-021-13739-3

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