EUROPEAN JOURNAL OF SUSTAINABLE DEVELOPMENT RESEARCH
Research Article

Determinants of Greenhouse Gas Emissions

European Journal of Sustainable Development Research, 2022, 6(4), em0194, https://doi.org/10.21601/ejosdr/12176
Full Text (PDF)

ABSTRACT

This paper examined the determinants (decomposed into enablers and de-enablers) of global greenhouse gas (GHG) emissions to deepen the debate on enhancing the implementation of the social cost of carbon or carbon pricing. Data from world development indicators were utilized in this study. The study leverages the autoregressive distributive lag model, pairwise granger causality, and impulse response function tests. This study found that there is a long-run relationship between selected economic indicators and GHG emissions in the global economy. In the long run, the GHG emissions enablers are FDI inflow and fossil fuel consumption. On the other hand, de-enablers of GHG emissions are GDP growth rate and merchandise trade. However, gas, oil, and coal use for electricity and fertilizer consumption have mixed finding across the regions. Also, the study observed that there exists no causality between GHG emissions and selected finance-related variables. A 1% shock in GHG emissions generates monetary volatility. Based on the findings that global trade generates a similar impact on GHG emissions across high-income countries, low-income countries, and middle-income countries. This study recommends the imposing of carbon tax and cap-and-trade on the GHGs polluting sectors and countries involved in the production and distribution of economic goods (activities) enabling GHG emissions.

KEYWORDS

climate change greenhouse gas social cost of climate change global possibility decoupling fontier

CITATION (APA)

Ibeabuchi, I. J., Amaefule, C., & Shoaga, A. (2022). Determinants of Greenhouse Gas Emissions. European Journal of Sustainable Development Research, 6(4), em0194. https://doi.org/10.21601/ejosdr/12176
Harvard
Ibeabuchi, I. J., Amaefule, C., and Shoaga, A. (2022). Determinants of Greenhouse Gas Emissions. European Journal of Sustainable Development Research, 6(4), em0194. https://doi.org/10.21601/ejosdr/12176
Vancouver
Ibeabuchi IJ, Amaefule C, Shoaga A. Determinants of Greenhouse Gas Emissions. EUR J SUSTAIN DEV RES. 2022;6(4):em0194. https://doi.org/10.21601/ejosdr/12176
AMA
Ibeabuchi IJ, Amaefule C, Shoaga A. Determinants of Greenhouse Gas Emissions. EUR J SUSTAIN DEV RES. 2022;6(4), em0194. https://doi.org/10.21601/ejosdr/12176
Chicago
Ibeabuchi, Igwe Justice, Chukwuemeka Amaefule, and Akeem Shoaga. "Determinants of Greenhouse Gas Emissions". European Journal of Sustainable Development Research 2022 6 no. 4 (2022): em0194. https://doi.org/10.21601/ejosdr/12176
MLA
Ibeabuchi, Igwe Justice et al. "Determinants of Greenhouse Gas Emissions". European Journal of Sustainable Development Research, vol. 6, no. 4, 2022, em0194. https://doi.org/10.21601/ejosdr/12176

REFERENCES

  1. Alam, M., Murad, W., Noman, H. A. and Ozturk, I. (2016). Relationships among carbon emissions, economic growth, energy consumption and population growth: Testing environmental Kuznets curve hypothesis for Brazil, China, India, and Indonesia. Ecological Indicators, 70, 466-479. https://doi.org/10.1016/j.ecolind.2016.06.043
  2. Amaefule, C. and Ebelebe, L. O. (2022). Climate change scare and FDI migration. European Journal of Sustainable Development Research, 6(3), em0191. https://doi.org/10.21601/ejosdr/12098
  3. Amaefule, C., Kalu, I. E., Udeorah, S. and Ebelebe, L. O. (2022). Fossil fuel consumption, CO2 emissions, and growth in high-income countries and low-income countries. European Journal of Sustainable Development Research, 6(3), em0190. https://doi.org/10.21601/ejosdr/12084
  4. Ameyaw, B. and Yao, L. (2018). Analysing the impact of GDP on CO2 emissions and forecasting Africa’s total CO2 emissions with non-assumption driven bidirectional long short-term memory. Sustainability, 10, 3110. https://doi.org/10.3390/su10093110
  5. Andersson, M., Baccianti, C., and Morgan, J. (2020). Climate change and the macro economy. European Central Bank, 243. https://doi.org/10.2139/ssrn.3632832
  6. Atici, C. (2012). Carbon emissions, trade liberalization, and the Japan-ASEAN interaction: A group-wise examination. The Journal of the Japanese and International Economies, 26, 167-178. https://doi.org/10.1016/j.jjie.2011.07.006
  7. Balogh, J. M. and Jambor, A. (2017). Determinants of CO2 emission: A global evidence. International Journal of Energy Economics and Policy, 7(5), 217-226.
  8. Batten, S., Sowerbutts, R. and Tanaka, M. (2020). Climate change: Macroeconomic impact and implications for monetary policy. In T. Walker, D. Gramlich, M. Bitar and P. Fardnia (Eds.), Ecological, societal, and technological risks and the fnancial sector (pp. 13-38). Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-38858-4_2
  9. Bauer, M. D. and Rudebusch, G. D. (2020). The rising cost of climate change: Evidence from bond market. Federal Reserve Bank of San Francisco WP 2020-25. https://doi.org/10.2139/ssrn.3649958
  10. Bekhet, H. A. and Yasmin, T. (2017). CO2 emissions, energy consumption, economic growth, and financial development in GCC countries: Dynamic simultaneous equation models. Renewable and Sustainable Energy Reviews, 70, 117-132. https://doi.org/10.1016/j.rser.2016.11.089
  11. Brown, L. and Das, A. (2020). Remittances and CO2 emissions in Jamaica: An asymmetric modified environmental Kuznets curve. The Journal of Economic Asymmetries, 22, e00166. https://doi.org/10.1016/j.jeca.2020.e00166
  12. Brown, O. (2008). Migration and climate change. Switzerland: IOM International Organization for Migration. https://doi.org/10.18356/26de4416-en
  13. Carney, M. (2015). Breaking the tragedy of the horizon-climate change and financial stability [Speech presentation]. Lloyd’s of London.
  14. Cederborg, J. and Snobohm, S. (2016). Is there a relationship between economic growth and carbon dioxide emissions? Stockholm: Sodertorns Hogskola.
  15. Chien, F. and Sadiq, M. (2022). The role of renewable energy and urnabization towards greenhouse gas emission in top Asian countries: Evidence from advance estimations. Renewable Energy, 186, 207-216. https://doi.org/10.1016/j.renene.2021.12.118
  16. Dafermos, Y., Nikolaidi, M. and Galanis, G. (2018). Climate change, financial stability, and monetary policy. Ecological Economics, 152, 219-234. https://doi.org/10.1016/j.ecolecon.2018.05.011
  17. Dietz, T. and Rosa, E. A. (1994). Effects of population and affluence on CO2 emissions. Proceedings of the National Academy of Sciences of the United States of America, 94(1), 175-179. https://doi.org/10.1073/pnas.94.1.175
  18. Ehrlich, P. R. and Holden, J. P. (1971). Impact of population growth. Science, 171, 1212-1217. https://doi.org/10.1126/science.171.3977.1212
  19. Gonzalez-Sanchez, M. and Martin-Ortega, J. L. (2020). Greenhouse gas emissions growth in Europe: A comparative analysis of determinants. Sustainability, 12, 1012. https://doi.org/10.3390/su12031012
  20. Griffiths, C., Kopits, E., Marten, A., Moore, C., Newbold, S. and Wolverton, A. (2000). Chapter 4: The social cost of carbon: Valuing carbon reductions in policy analysis. IMF e-library.
  21. Hautel, G. and Fischer, C. (2013). Environmental macroeconomics: Environmental policy, business cycles, and directed technical change. NBER WPS, No 18794. https://doi.org/10.3386/w18794
  22. Khan, Z. U., Ahmad, M. and Khan, A. (2020). On the remittance-environment led hypothesis: Empirical evidence from BRICS economies. Environmental Science and Pollution Research, 27,16460-16471. https://doi.org/10.1007/s11356-020-07999-8
  23. Lagarde, C. (2021). Climate change and central banking. [Keynote speech]. The ILF Conference on Green Banking and Green Central Banking. https://doi.org/10.1515/9783110752892-015
  24. Li, Z., Dong, H., Huang, Z. and Failler, P. (2019). Impact of foreign direct investment on environmental performance. Sustainability, 11, 3538. https://doi.org/10.3390/su11133538
  25. Lindsey, R. (2020). Climate change: Atmospheric carbon dioxide. https://www.climate.gov/news-features/understanding-climate/climate-change-atmospheric-carbon-dioxide
  26. McLeman, R. (2011). Climate change, migration, and critical international security considerations. International Organization for Migration. https://doi.org/10.18356/cbe15386-en
  27. Nordhaus, W. (2017). Integrated assessment models of climate change. National Bureau of Economic Research. https://climateanalytics.org/
  28. Nordhaus, W. D. (1993). Optimal greenhouse-gas reductions and tax policy in the DICE model. The American Economic Review, 81(2), 313-317.
  29. Nordhaus, W. D. and Yang, Z. (1996). A regional dynamic general-equilibrium model of alternative climate-change strategies. The American Economic Review, 86(4), 741-765.
  30. Plass, G. N. (1955). The carbon dioxide theory of climate change. Baltimore: The John Hopkins University.
  31. Rahman, M. I. (2012). Climate change: A theoretical review. Multidisciplinary Description of Complex Systems, 11(1), 1-13. https://doi.org/10.7906/indecs.11.1.1
  32. Sarkodie, S. A. and Leirvik, T. (2020). FDI and renewable energy in climate change mitigation: Does governance matter? Journal of Cleaner Production, 263, 121262, https://doi.org/10.1016/j.jclepro.2020.121262
  33. Shi, A. (2001). Population growth and global carbon dioxide emissions. Development Research Group, The World Bank. https://iussp.org/sites/default/files/Brazil2001/s00/S09_04_Shi.pdf
  34. Sims, R. E. H., Schaeffer, R., Creutzig, F., Cruz-Nunez, X., et al. (2014). Transport. In O. Edenhofer, R. Pichs-Madruga, Y. Sokona, J. C. Minx, et al. (Eds.), Climate change 2014: Mitigation of climate change (pp. 599-670). Cambridge/NY: Cambridge University Press.
  35. Sterpu, M., Soava, G. and Mehedintu, A. (2018). Impact of economic growth and energy consumption on greenhouses gas emissions: Testing environmental curves hypotheses on EU countries. Sustainability, 10, 3327. https://doi.org/10.3390/su10093327
  36. Su, M., Pauleit, S., Yin, X., Zheng, Y., Chen, S. and Xu, C. (2016). Greenhouse gas emission accounting for EU member states from 1991 to 2012. Applied Energy, 184, 759-768. https://doi.org/10.1016/j.apenergy.2016.02.074
  37. Sun, H., Clottey, S. A., Geng, Y., Fang, K. and Amissah, J. C. K. (2019). Trade openness and carbon emissions: Evidence from belt and road countries. Sustainability, 11, 2682. https://doi.org/10.3390/su11092682
  38. Taylor, J. B (1995). The monetary transmission mechanism: An empirical framework. Journal of Economic Perspectives, 9(4), 11-26. https://doi.org/10.1257/jep.9.4.11
  39. UNCTAD. (2020). Trade set to plunge as COVID-19 pandemic upends global economy. https://www.wto.org/english/news_e/pres20_e/pr855_e.htm
  40. UNEP. (2015). UNEP annual report 2015. www.unep.org/resources
  41. UNEP. (2020). Sustainable trade in resources: Global material flow, circularity and trade. https://www.unep.org/resources/publication/sustainable-trade-resources-global-material-flows-circularity-and-trade
  42. UNFCCC. (1994). Conventions. United Nations Framework Convention on Climate Change. https://unfccc.int/resource/docs/convkp/conveng.pdf
  43. UNFCCC. (2015). The Paris Agreement. United Nations Framework Convention on Climate Change. https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement
  44. Willett, H. C. (1949). Long-period fluctuations of the general circulation of the atmosphere. Journal of Atmospheric Sciences, 6(1), 34-50. https://doi.org/10.1175/1520-0469(1949)006<0034:LPFOTG>2.0.CO;2
  45. WMO. (2019). Greenhouse gas concentrations in atmosphere reach yet another high. https://public.wmo.int/en/media/press-release/greenhouse-gas-concentrations-atmosphere-reach-yet-another-high
  46. WMO. (2020). The state of the global climate 2020: Unpacking the indicators. World Meteorological Organization. https://public.wmo.int/en/our-mandate/climate/wmo-statement-state-of-global-climate
  47. World Bank. (2020). World development indicators. https://databank.worldbank.org/source/world-development-indicators
  48. WTO. (2020a). Agreements on climate change, trade and sustainability (ACCTS). www.wto.org
  49. WTO. (2020b). Trade set plunge as COVID-19 pandemic upends global economy. https://www.wto.org/english/news_e/pres20_e/pr855_e.htm
  50. WTO. (2020c). WTO, UNEP events highlights of role trade in green recovery. www.sdg.iisd.org
  51. WTO-UNEP. (2009). Trade and climate change. World Trade Review, 9(1), 273-288.
  52. Zhang, S., Liu, X. and Bae, J. (2017). Does trade openness affect CO2 emissions: Evidence from ten newly industrialized countries? Environmental Science and Pollution Research, 24, 17616-17625. https://doi.org/10.1007/s11356-017-9392-8
  53. Zhou, Y., Fu, J., Kong, Y. and Wu, R. (2018). How FDI influences carbon emissions, based on the empirical analysis of Chinese urban data. Sustainability, 10, 2163. https://doi.org/10.3390/su10072163
  54. Zhu, H., Duan, L., Guo, Y. and Yu, K. (2016). The effects of FDI, economic growth, and energy consumption on carbon emission in ASEAN-5: Evidence from panel quantile regression. Economic Modelling, 58, 237-248. https://doi.org/10.1016/j.econmod.2016.05.003

LICENSE

Creative Commons License
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.