Abstract
The study intends to estimate the relationship between forest, renewable energy, and agricultural growth based on three heterogeneous indicators (total cereal production, total cereal harvested area, and total cereal yield) on economic growth and environment performance of Nepal over 1990–2018. The analysis considered potential structural breaks based on available long time-series data and calculated the cointegration relationship between selected variables. The results supported the existence of cointegration in the presence of structural breaks. Similarly, the autoregressive distributed lag approach shows that forests, renewable energy, and urbanization are key factors in improving Nepal's environmental quality. The findings also suggest that forest resources themselves influence economic growth and provide evidence of the resources curse. Renewable energy, agricultural development, and urbanization are factors that help boost the country's economic growth. Consequently, the results also support the existence of the traditional environmental Kuznets curve by controlling for the effects of heterogeneous indicators of agricultural growth. Based on the findings, the study has developed some policies that may be useful for the theory and practice of Nepalese policymakers.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Adebola Solarin, S., Al-Mulali, U., & Ozturk, I. (2017). Validating the environmental Kuznets curve hypothesis in India and China: The role of hydroelectricity consumption. Renewable and Sustainable Energy Reviews, 80, 1578–1587. https://doi.org/10.1016/J.RSER.2017.07.028
Ahmad, N., Du, L., Lu, J., Wang, J., Li, H.-Z., Hashmi, M. Z., et al. (2017). Modelling the CO2 emissions and economic growth in Croatia: Is there any environmental Kuznets curve? Energy, 123(C), 164–172.
Al-Mulali, U., Ozturk, I., & Solarin, S. A. (2016a). Investigating the environmental Kuznets curve hypothesis in seven regions: The role of renewable energy. Ecological Indicators, 67, 267–282.
Al-Mulali, U., Saboori, B., & Ozturk, I. (2015). Investigating the environmental Kuznets curve hypothesis in Vietnam. Energy Policy, 76, 123–131. https://doi.org/10.1016/j.enpol.2014.11.019
Anwar, K., Yang, C., Wang, X. Y., Jamal, H., Liu, S., & Sadia, B. (2020). Examining the pollution haven, and environmental Kuznets hypothesis for ecological footprints: An econometric analysis of China, India, and Pakistan. Journal of the Asia Pacific Economy. https://doi.org/10.1080/13547860.2020.1761739
Baek, J. (2016). Do nuclear and renewable energy improve the environment? Empirical evidence from the United States. Ecological Indicators, 66, 352–356. https://doi.org/10.1016/j.ecolind.2016.01.059
Baležentis, T., Streimikiene, D., Zhang, T., & Liobikiene, G. (2019). The role of bioenergy in greenhouse gas emission reduction in EU countries: An Environmental Kuznets Curve modelling. Resources, Conservation and Recycling, 142, 225–231. https://doi.org/10.1016/j.resconrec.2018.12.019
Balsalobre-Lorente, D., Gokmenoglu, K. K., Taspinar, N., & Cantos-Cantos, J. M. (2019). An approach to the pollution haven and pollution halo hypotheses in MINT countries. Environmental Science and Pollution Research, 26(22), 23010–23026. https://doi.org/10.1007/s11356-019-05446-x
Bekhet, H. A., & Othman, N. S. (2017). Impact of urbanization growth on Malaysia CO2 emissions: Evidence from the dynamic relationship. Journal of Cleaner Production, 154, 374–388. https://doi.org/10.1016/j.jclepro.2017.03.174
Bekhet, H. A., & Othman, N. S. (2018). The role of renewable energy to validate dynamic interaction between CO2 emissions and GDP toward sustainable development in Malaysia. Energy Economics, 72, 47–61. https://doi.org/10.1016/j.eneco.2018.03.028
Ben Jebli, M., & Ben Youssef, S. (2015). The environmental Kuznets curve, economic growth, renewable and non-renewable energy, and trade in Tunisia. Renewable and Sustainable Energy Reviews. https://doi.org/10.1016/j.rser.2015.02.049
Burke, M. J., & Stephens, J. C. (2018). Political power and renewable energy futures: A critical review. Energy Research and Social Science, 35(March 2017), 78–93. https://doi.org/10.1016/j.erss.2017.10.018
Danish, Z. B., Wang, B., & Wang, Z. (2017). Role of renewable energy and non-renewable energy consumption on EKC: Evidence from Pakistan. Journal of Cleaner Production, 156, 855–864. https://doi.org/10.1016/j.jclepro.2017.03.203
Destek, M. A., Shahbaz, M., Okumus, I., Hammoudeh, S., & Sinha, A. (2020). The relationship between economic growth and carbon emissions in G-7 countries: Evidence from time-varying parameters with a long history. Environmental Science and Pollution Research, 27(23), 29100–29117. https://doi.org/10.1007/s11356-020-09189-y
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. Environmental Science and Pollution Research, 24(11), 10846–10854. https://doi.org/10.1007/s11356-017-8786-y
Dogan, E., & Seker, F. (2016). Determinants of CO2 emissions in the European Union: The role of renewable and non-renewable energy. Renewable Energy, 94, 429–439. https://doi.org/10.1016/j.renene.2016.03.078
Dogan, E., Ulucak, R., Kocak, E., & Isik, C. (2020). The use of ecological footprint in estimating the Environmental Kuznets Curve hypothesis for BRICST by considering cross-section dependence and heterogeneity. Science of the Total Environment, 723, 138063. https://doi.org/10.1016/j.scitotenv.2020.138063
Dong, K., Sun, R., Jiang, H., & Zeng, X. (2018). CO2 emissions, economic growth, and the environmental Kuznets curve in China: What roles can nuclear energy and renewable energy play? Journal of Cleaner Production, 196, 51–63. https://doi.org/10.1016/j.jclepro.2018.05.271
Dwivedi, Y. K., Hughes, L., Kar, A. K., Baabdullah, A. M., Grover, P., Abbas, R., et al. (2022). Climate change and COP26: Are digital technologies and information management part of the problem or the solution? An editorial reflection and call to action. International Journal of Information Management, 63, 102456. https://doi.org/10.1016/j.ijinfomgt.2021.102456
EIA. (2019). Annual Energy Outlook 2019 with projections to 2050. U.S. Energy Information Administration. https://www.eia.gov/aeo
Erum, N., & Hussain, S. (2019). Corruption, natural resources and economic growth: Evidence from OIC countries. Resources Policy. https://doi.org/10.1016/j.resourpol.2019.101429
FAOSTAT. (2019). Food and Agriculture Organization Corporate Statistical Database. FAOSTAT. http://www.fao.org/faostat/en/#country/149. Accessed 19 Nov 2020.
Figueroa, E. B., & Pastén, R. C. (2009). Country-specific environmental kuznets curves: a random coefficient approach applied to high-income countries. Estudios De Economía. https://doi.org/10.4067/s0718-52862009000100001
Fodha, M., & Zaghdoud, O. (2010). Economic growth and pollutant emissions in Tunisia: An empirical analysis of the environmental Kuznets curve. Energy Policy, 38(2), 1150–1156. https://doi.org/10.1016/j.enpol.2009.11.002
Friedl, B., & Getzner, M. (2003). Determinants of CO2 emissions in a small open economy. Ecological Economics, 45(1), 133–148. https://doi.org/10.1016/S0921-8009(03)00008-9
Gasimli, O., ul Haq, I., Gamage, S. K. N., Shihadeh, F., Rajapakshe, P. S. K., & Shafiq, M. (2019). Energy, Trade, Urbanization and Environmental Degradation Nexus in Sri Lanka: Bounds Testing Approach. Energies, 12(9), 1655. https://doi.org/10.3390/en12091655
Gokmenoglu, K. K., & Taspinar, N. (2018). Testing the agriculture-induced EKC hypothesis: The case of Pakistan. Environmental Science and Pollution Research, 25(23), 22829–22841. https://doi.org/10.1007/s11356-018-2330-6
Gorus, M. S., & Aslan, M. (2019). Impacts of economic indicators on environmental degradation: Evidence from MENA countries. Renewable and Sustainable Energy Reviews, 103, 259–268. https://doi.org/10.1016/j.rser.2018.12.042
Gregory, A. W., & Hansen, B. E. (1996). Residual-based tests for cointegration in models with regime shifts. Journal of Econometrics, 70(1), 99–126. https://doi.org/10.1016/0304-4076(69)41685-7
Grossman, G., & Krueger, A. (1991). Environmental impacts of a north American free trade agreement. National Bureau of Economic Research. https://doi.org/10.3386/w3914
Hao, Y., Chen, H., & Zhang, Q. (2016). Will income inequality affect environmental quality? Analysis based on China’s provincial panel data. Ecological Indicators, 67, 533–542. https://doi.org/10.1016/j.ecolind.2016.03.025
IEA. (2019). Global Energy & CO2 Status Report 2019. International Energy Agency. https://www.iea.org/reports/global-energy-co2-status-report-2019. Accessed 19 Nov 2020.
IREA. (2016). Renewable Energy Statistics 2016. International Renewable Energy Agency.
Iwata, H., Okada, K., & Samreth, S. (2010). Empirical study on the environmental Kuznets curve for CO2 in France: The role of nuclear energy. Energy Policy, 38(8), 4057–4063. https://doi.org/10.1016/j.enpol.2010.03.031
Jahangir Alam, M., Ara Begum, I., 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. https://doi.org/10.1016/j.enpol.2012.02.022
Kanjilal, K., & Ghosh, S. (2013). Environmental Kuznet’s curve for India: Evidence from tests for cointegration with unknown structuralbreaks. Energy Policy, 56, 509–515. https://doi.org/10.1016/j.enpol.2013.01.015
Khan, A., Chenggang, Y., Hussain, J., & Bano, S. (2019). Does energy consumption, financial development, and investment contribute to ecological footprints in BRI regions? Environmental Science and Pollution Research, (kakar 2016). https://doi.org/10.1007/s11356-019-06772-w
Khan, A., Chenggang, Y., Hussain, J., Bano, S., & Nawaz, A. (2020). Natural resources, tourism development, and energy-growth-CO2 emission nexus_ A simultaneity modeling analysis of BRI countries. Resources Policy, 68, 101751. https://doi.org/10.1016/j.resourpol.2020.101751
Khatoon, R., Javed, I., & Hayat, M. M. (2021). Impact of human capital on economic growth: A case study of Pakistan. Journal of Social Sciences Advancement, 2(2), 64–69. https://doi.org/10.52223/jssa21-020202-15
Li, J., Huang, X., Kwan, M. P., Yang, H., & Chuai, X. (2018). The effect of urbanization on carbon dioxide emissions efficiency in the Yangtze River Delta, China. Journal of Cleaner Production, 188, 38–48. https://doi.org/10.1016/j.jclepro.2018.03.198
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. Journal of Cleaner Production, 164, 1239–1247. https://doi.org/10.1016/j.jclepro.2017.07.086
Masih, A. M. M., & Masih, R. (1997). On the temporal causal relationship between energy consumption, real income, and prices: Some new evidence from Asian-energy dependent NICs based on a multivariate cointegration/vector error-correction approach. Journal of Policy Modeling, 19(4), 417–440. https://doi.org/10.1016/s0161-8938(96)00063-4
Murshed, M., & Dao, N. T. T. (2020). Revisiting the CO2 emission-induced EKC hypothesis in South Asia: The role of Export Quality Improvement. GeoJournal. https://doi.org/10.1007/s10708-020-10270-9
Narayan, P. K. (2005). The saving and investment nexus for China: Evidence from cointegration tests. Applied Economics, 37(17), 1979–1990. https://doi.org/10.1080/00036840500278103
Narayan, P. K., & Narayan, S. (2010). Carbon dioxide emissions and economic growth: Panel data evidence from developing countries. Energy Policy, 38(1), 661–666. https://doi.org/10.1016/j.enpol.2009.09.005
Nasir, M., & Ur Rehman, F. (2011). Environmental Kuznets Curve for carbon emissions in Pakistan: An empirical investigation. Energy Policy, 39(3), 1857–1864. https://doi.org/10.1016/j.enpol.2011.01.025
Nemat, S. (1994). Economic development and environmental quality: An econometric analysis. Oxford Economic Papers, 46, 757–773.
Nguyen, H. M., & Nguyen, L. D. (2018). The relationship between urbanization and economic growth an empirical study on ASEAN countries. International Journal of Social Economics, 45(2), 316–339. https://doi.org/10.1108/IJSE-12-2016-0358
Ozatac, N., Gokmenoglu, K. K., & Taspinar, N. (2017). Testing the EKC hypothesis by considering trade openness, urbanization, and financial development: The case of Turkey. Environmental Science and Pollution Research, 24(20), 16690–16701. https://doi.org/10.1007/s11356-017-9317-6
Parajuli, R., Østergaard, P. A., Dalgaard, T., & Pokharel, G. R. (2014). Energy consumption projection of Nepal: An econometric approach. Renewable Energy, 63, 432–444. https://doi.org/10.1016/j.renene.2013.09.048
Pata, U. K. (2018). The influence of coal and noncarbohydrate energy consumption on CO2 emissions: Revisiting the environmental Kuznets curve hypothesis for Turkey. Energy, 160, 1115–1123. https://doi.org/10.1016/j.energy.2018.07.095
Paustian, K., Antle, J. M., Sheehan, J., & Paul, E. A. (2006). Agriculture’s role in greenhouse gas mitigation. Center for Climate and Energy Solutions. https://agris.fao.org/agris-search/search.do?recordID=GB2013203398. Accessed 19 Nov 2020.
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326. https://doi.org/10.1002/jae.616
Phillips, P. C. B., & Perron, P. (1988). Testing for a unit root in time series regression. Biometrika, 75(2), 335. https://doi.org/10.2307/2336182
Powell, B., Ickowitz, A., Mcmullin, S., Jamnadass, R., Padoch, C., Pinedo--Vasquez, M., & Sunderland, T. (2013). The Role of Forests, Trees and Wild Biodiversity for Nutrition-Sensitive Food Systems and Landscapes. www.fao.org/publications. Accessed 8 Dec 2020.
Qiao, H., Zheng, F., Jiang, H., & Dong, K. (2019). The greenhouse effect of the agriculture-economic growth-renewable energy nexus: Evidence from G20 countries. Science of the Total Environment, 671, 722–731. https://doi.org/10.1016/j.scitotenv.2019.03.336
Rafiq, S., Salim, R., & Apergis, N. (2016). Agriculture, trade openness and emissions: an empirical analysis and policy options. Australian Journal of Agricultural and Resource Economics, 60(3), 348–365. https://doi.org/10.1111/1467-8489.12131
Rahman, M. M., & Kashem, M. A. (2017). Carbon emissions, energy consumption and industrial growth in Bangladesh: Empirical evidence from ARDL cointegration and Granger causality analysis. Energy Policy, 110(August), 600–608. https://doi.org/10.1016/j.enpol.2017.09.006
Raza, S. A., Shahbaz, M., & Nguyen, D. K. (2015). Energy conservation policies, growth and trade performance: Evidence of feedback hypothesis in Pakistan. Energy Policy, 80, 1–10. https://doi.org/10.1016/j.enpol.2015.01.011
REN21. (2019). Renewables 2019 Global Status Report. Ren21 (Vol. 105). http://www.ren21.net/gsr-2019/pages/foreword/foreword/. Accessed 19 Nov 2020
Ridzuan, N. H. A. M., Marwan, N. F., Khalid, N., Ali, M. H., & Tseng, M. L. (2020). Effects of agriculture, renewable energy, and economic growth on carbon dioxide emissions: Evidence of the environmental Kuznets curve. Resources, Conservation and Recycling, 160, 104879. https://doi.org/10.1016/j.resconrec.2020.104879
Riti, J. S., & Shu, Y. (2016). Renewable energy, energy efficiency, and eco-friendly environment (R-E5) in Nigeria. Energy, Sustainability and Society, 6(1), 13. https://doi.org/10.1186/s13705-016-0072-1
Routa, J., Kellomäki, S., Kilpeläinen, A., Peltola, H., & Strandman, H. (2011). Effects of forest management on the carbon dioxide emissions of wood energy in integrated production of timber and energy biomass. GCB Bioenergy, 3(6), 483–497. https://doi.org/10.1111/j.1757-1707.2011.01106.x
Saboori, B., Sapri, M., & bin Baba, M. (2014). Economic growth, energy consumption and CO2 emissions in OECD (Organization for Economic Co-operation and Development)’s transport sector: A fully modified bi-directional relationship approach. Energy, 66, 150–161. https://doi.org/10.1016/j.energy.2013.12.048
Saboori, B., Sulaiman, J., & Mohd, S. (2012). Economic growth and CO2 emissions in Malaysia: A cointegration analysis of the Environmental Kuznets Curve. Energy Policy, 51, 184–191. https://doi.org/10.1016/j.enpol.2012.08.065
Sapkota, P., & Bastola, U. (2017). Foreign direct investment, income, and environmental pollution in developing countries: Panel data analysis of Latin America. Energy Economics, 64(C), 206–212. https://doi.org/10.1016/j.eneco.2017.04.001
Sarkodie, S. A., & Owusu, P. A. (2017). The relationship between carbon dioxide, crop and food production index in Ghana: By estimating the long-run elasticities and variance decomposition. Environmental Engineering Research, 22(2), 193–202. https://doi.org/10.4491/eer.2016.135
Sertoglu, K., & Dogan, N. (2016). Agricultural trade and its determinants: Evidence from bounds testing approach for Turkey. International Journal of Economics and Financial Issues, 6(2), 450–455. https://ideas.repec.org/a/eco/journ1/2016-02-12.html. Accessed 19 Nov 2020.
Shahbaz, M., Dube, S., Ozturk, I., & Jalil, A. (2015). Testing the Environmental Kuznets Curve Hypothesis in Portugal. International Journal of Energy Economics and Policy |, 5(2), 475–481. http:www.econjournals.com. Accessed 20 Nov 2020.
Shahbaz, M., & Sinha, A. (2019). Environmental Kuznets curve for CO2 emissions: A literature survey. Journal of Economic Studies, 46(1), 106–168. https://doi.org/10.1108/JES-09-2017-0249
Sinha, A., & Shahbaz, M. (2018). Estimation of Environmental Kuznets Curve for CO2 emission: Role of renewable energy generation in India. Renewable Energy, 119, 703–711. https://doi.org/10.1016/J.RENENE.2017.12.058
Soytas, U., & Sari, R. (2006). Energy consumption and income in G-7 countries. Journal of Policy Modeling, 28(7), 739–750. https://doi.org/10.1016/j.jpolmod.2006.02.003
Statista. (2019). Nepal: Distribution of gross domestic product (GDP) across economic sectors from 2009 to 2019. Statista.
Thuy, P. T., Moeliono, M., Locatelli, B., Brockhaus, M., Di Gregorio, M., & Mardiah, S. (2014). Integration of adaptation and mitigation in climate change and forest policies in Indonesia and Vietnam. Forests, 5(8), 2016–2036. https://doi.org/10.3390/f5082016
Waheed, R., Chang, D., Sarwar, S., & Chen, W. (2018). Forest, agriculture, renewable energy, and CO2 emission. Journal of Cleaner Production, 172, 4231–4238. https://doi.org/10.1016/J.JCLEPRO.2017.10.287
Wan, G. (2013). Why urbanization may benefit the environment. Asian Development Bank.
Wang, X., Wu, S., & Gao, F. (2010). The relationship between economic growth and agricultural growth: The case of China. In Proceedings of the International Conference on E-Business and E-Government, ICEE 2010 (pp. 5315–5318). https://doi.org/10.1109/ICEE.2010.1330
World Development Indicators (WDI). (2019). Database [WWW Document]. World Bank database. https://datatopics.worldbank.org/world-development-indicators/. Accessed 1 Apr 2022.
World Resources Institute. (2019). 5 Questions about Agricultural emissions, answered. World Resources Institute. https://www.wri.org/blog/2019/07/5-questions-about-agricultural-emissions-answered. Accessed 19 Nov 2020.
World Bank database. (2019). World Development Indicators (WDI) Database. World Bank group.
Zhang, L., Pang, J., Chen, X., & Lu, Z. (2019). Carbon emissions, energy consumption and economic growth: Evidence from the agricultural sector of China’s main grain-producing areas. Science of the Total Environment, 665, 1017–1025. https://doi.org/10.1016/j.scitotenv.2019.02.162
Zhang, S., Liu, X., & Bae, J. (2017). Does trade openness affect CO2 emissions: Evidence from ten newly industrialized countries? Environmental Science and Pollution Research, 24(21), 17616–17625. https://doi.org/10.1007/s11356-017-9392-8
Zivot, E., & Andrews, D. W. K. (1992). Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis. Journal of Business & Economic Statistics, 10(3), 251. https://doi.org/10.2307/1391541
Author information
Authors and Affiliations
Corresponding authors
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Appendix
Rights and permissions
About this article
Cite this article
Regmi, K., Qiao, J., Hussain, J. et al. The effect of cereal production, cereal harvested area, and cereal yield, and forest on economic growth and environmental performance in Nepal. Econ Polit 39, 739–762 (2022). https://doi.org/10.1007/s40888-022-00278-4
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s40888-022-00278-4