Abstract
There is a lack of proper research that highlights the impact of institutional quality (IQ) and renewable energy consumption (REC) on the carbon emission (CE). The significance of IQ and REC in the achievement of zero CE is highlighted in this research. The current research reports the effects of these important factors on the consumption-based carbon emissions in the G-7 countries from 1995 to 2018. Based on the outcome of the cointegration test, the long-run connection is recognized between IQ, REC, GDP, exports, imports, and consumption-based CE. The findings also validated that there exist significant decrease and increase in the CE in both the short and long run; for instance, IQ, REC, and exports decrease the CE, while imports and GDP increase the CE. The estimates of causality test showed that policies aimed at improving IQ, REC, GDP, exports, and imports have a significant impact on the CE. Consequently, based on these results, policymakers in the G-7 must prioritize IQ and REC to enhance environmental quality and attain carbon neutrality.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Data availability
The datasets used and/or analysed during the current study are available from the corresponding author on reasonable request.
References
Chudik A, Pesaran MH (2015) Common correlated effects estimation of heterogeneous dynamic panel data models with weakly exogenous regressors. Journal of Econometrics 188:393–420
CNCA (2019) 2019 Annual Report. Carbon Neutral Cities Alliance Annual Report 2019, January, 51. http://carbonneutralcities.org/wp-content/uploads/2020/02/CNCA-2019-Annual-Report.pdf
De-yong XGYS (2010) An empirical research on the relationship of export trade, economic growth and carbon emissions. Journal of International Trade 1
Destek MA, Sarkodie SA (2019) Investigation of environmental Kuznets curve for ecological footprint: the role of energy and financial development. Sci Total Environ 650:2483–2489
Ding Q, Khattak SI, Ahmad M (2021) Towards sustainable production and consumption: assessing the impact of energy productivity and eco-innovation on consumption-based carbon dioxide emissions (CCO2) in G-7 nations. Sustainable Production and Consumption 27:254–268
Gahlawat IN, Lakra P (2020) Global climate change and its effects. Integrated Journal of Social Sciences 7:14–23
GCA (2020) Global Carbon Atlas. http://www.globalcarbonatlas.org/en/CO2 emissions. Accessed 22 Jan 2021
Ghosh S (2010) Examining carbon emissions economic growth nexus for India: a multivariate cointegration approach. Energy Policy 38:3008–3014
Haldar A, Sethi N (2021) Effect of institutional quality and renewable energy consumption on CO2 emissions−an empirical investigation for developing countries. Environ Sci Pollut Res 28:15485–15503
Halicioglu F (2009) An econometric study of CO2 emissions, energy consumption, income and foreign trade in Turkey. Energy Policy 37:1156–1164
Hao L-N, Umar M, Khan Z, Ali W (2021) Green growth and low carbon emission in G7 countries: how critical the network of environmental taxes, renewable energy and human capital is? Science of the Total Environment 752:141853
Kapetanios G, Pesaran MH, Yamagata T (2011) Panels with non-stationary multifactor error structures. Journal of Econometrics 160:326–348
Khan Z, Ali M, Jinyu L, Shahbaz M, Siqun Y (2020) Consumption-based carbon emissions and trade nexus: evidence from nine oil exporting countries. Energy economics 89:104806
Khan Z, Ali M, Kirikkaleli D, Wahab S, Jiao Z (2020b) The impact of technological innovation and public-private partnership investment on sustainable environment in China: consumption-based carbon emissions analysis. Sustain Dev 28:1317–1330
Li H, Shahbaz M, Jiang H, Dong K (2021) Is natural gas consumption mitigating air pollution? Fresh evidence from national and regional analysis in China. Sustainable Production and Consumption 27:325–336
Liddle B (2018) Consumption-based accounting and the trade-carbon emissions nexus. Energy Economics 69:71–78
Menegaki A (2008) Valuation for renewable energy: a comparative review. Renew Sustain Energy Rev 12:2422–2437
Pachauri RK (2007) Climate change 2007: synthesis report. contribution of working groups i, ii and iii to the fourth assessment report of the intergovernmental panel on climate change. Speculum, 77(2), 586-588.
Paramati SR, Ummalla M, Apergis N (2016) The effect of foreign direct investment and stock market growth on clean energy use across a panel of emerging market economies. Energy Economics 56:29–41
Pesaran MH (2006) Estimation and inference in large heterogeneous panels with a multifactor error structure. Econometrica 74:967–1012
Pesaran MH (2007) A simple panel unit root test in the presence of cross-section dependence. J Appl Economet 22:265–312
Pesaran MH, Yamagata T (2008) Testing slope homogeneity in large panels. Journal of Econometrics 142:50–93
Repetto R (2001) The Clean Development Mechanism: institutional breakthrough or institutional nightmare. Policy Sci 34:303–327
Royapoor M, Du H, Wade N, Goldstein M, Roskilly T, Taylor P, Walker S (2019) Carbon mitigation unit costs of building retrofits and the scope for carbon tax, a case study. Energy and Buildings 203:109415
Safi A, Chen Y, Wahab S, Zheng L, Rjoub H (2021) Does environmental taxes achieve the carbon neutrality target of G7 economies? Evaluating the importance of environmental R&D. Journal of Environmental Management 293:112908
Salim RA, Rafiq S (2012) Why do some emerging economies proactively accelerate the adoption of renewable energy? Energy Economics 34:1051–1057
Shahbaz M, Nasir MA, Hille E, Mahalik MK (2020) UK’s net-zero carbon emissions target: investigating the potential role of economic growth, financial development, and R&D expenditures based on historical data (1870–2017). Technological Forecasting and Social Change 161:120255
Sun H, Edziah BK, Sun C, Kporsu AK (2019) Institutional quality, green innovation and energy efficiency. Energy policy 135:111002
Wahab S, Zhang X, Safi A, Wahab Z, Amin M (2021) Does energy productivity and technological innovation limit trade-adjusted carbon emissions? Economic Research-Ekonomska Istraživanja 34:1896–1912
Wang K-M (2013) The relationship between carbon dioxide emissions and economic growth: quantile panel-type analysis. Qual Quant 47:1337–1366
World Bank (2020) World Data Bank. http://databank.worldbank.org/data/home.aspx. Accessed January 2021
Westerlund J (2007) Testing for error correction in panel data. Oxford Bull Econ Stat 69:709–748
Zhao J, Jiang Q, Dong X, Dong K (2021) Assessing energy poverty and its effect on CO2 emissions: the case of China. Energy economics 97:105191
Funding
This paper is financially supported by the following projects: “Research on the effectiveness evaluation, risk control and system construction of the agricultural credit guarantee policy”, National Natural Science Foundation of China (NSFC, Jan. 2019–Dec. 2022, No. 71873100). Sponsor and host Jianchao Luo. This paper is also supported by “Research on major practical and policy issues of agricultural and rural modernization in Shaanxi Province in the new era”, Shaanxi Agricultural Collaborative Innovation and Promotion Alliance, 2018 and 2020 Major Science and Technology Projects, Oct. 2018–Dec. 2019, Jan. 2020–Dec. 2020, Nos. LMZD201804 and LMZD202006. Sponsor and host Jianchao Luo. This paper is also supported by “Study on the rural financial deepening, industrial integration and rural revitalization strategy”, Major Cultivation Project of Humanities and Social Sciences of Fundamental Research Foundation by Northwest A&F University, Jan. 2019–Dec. 2021, No. 2452019155. Sponsor and host Jianchao Luo.
Author information
Authors and Affiliations
Contributions
Arshad Ahmad Khan: Conceptualization, formal analysis, investigation, software, methodology, writing—original draft. Sufyan Ullah Khan: Data curation, writing—review and editing. Muhammad Abu Sufyan Ali: investigation, software, methodology, writing—original draft. Adnan Safi: Methodology, review and editing. Yuling Gao: Data curation, formal analysis. Jianchao Luo: Funding acquisition, project administration, supervision.
Corresponding author
Ethics declarations
Ethical approval
This is an observational study, and we confirmed that no ethical approval is required.
Consent to participate
Not applicable.
Consent for publication
Not applicable.
Competing interests
The authors declare no competing interests.
Additional information
Responsible Editor: Nicholas Apergis
Publisher's note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Supplementary Information
Below is the link to the electronic supplementary material.
Rights and permissions
About this article
Cite this article
Khan, A.A., Khan, S.U., Ali, M.A.S. et al. Identifying impact of international trade and renewable energy consumption on environmental quality improvement and their role in global warming. Environ Sci Pollut Res 29, 33935–33944 (2022). https://doi.org/10.1007/s11356-022-18574-8
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11356-022-18574-8