We use panel cointegration techniques to examine the relationship between renewable energy consumption, trade and output in a sample of 11 African countries covering the period 1980-2008. The results from panel error correction model reveal that there is evidence of bidirectional causality between output and exports and between output and imports in both the short-run and the long-run. However, in the short-run, there is no evidence of causality between output and renewable energy consumption and between trade (exports or imports) and renewable energy consumption. In the long-run, the FMOLS panel approach estimation shows that renewable energy consumption and trade (exports or imports) have a statistically significant and positive impact on output. Policies recommendations are that, in the long-run, international trade enables African countries to benefit from technology transfer and to build the human and physical capacities needed to produce more renewable energies, which in turn increases their output.

Output, renewable energy consumption and trade in Africa

This study is to examine how FDI and green economic growth are related in Southeast Asian economies. It also attempts to find out the role of fiscal policy development in the relationship between FDI and green growth in the economies of the region. For this purpose, a dynamic panel threshold model is used for the data over the period 2000–2018. The main results show that FDI has a positive impact on the progress of green growth in these economies, with a stronger impact in the group of Southeast Asian economies with high fiscal development. This result confirms the pollution halo hypothesis, which states that FDI can promote green growth in a country. Aligning economic priorities to improve green fiscal policies, reforming fiscal integration programs, planning for green job creation, and implementing policies to attract FDI are recommended as important policy implications over the COVID-19 period. 

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How are FDI and green recovery related in Southeast Asian economies?

The 4th industrial revolution and global decarbonisation are frequently referred to as two, interrelated megatrends. In particular, the former, technological revolution is expected to fundamentally change the economy, society, and financial systems, and may also create opportunities towards a zero-carbon future. Therefore, in the presence of the UK’s legally binding commitment to achieve a net-zero emissions target by 2050, we analyse the role of economic growth, R&D expenditures, financial development, and energy consumption in causing carbon dioxide (CO2) emissions. Our analysis is based on historical annual data from 1870 to 2017, thereby employing the bootstrapping bounds testing approach to examine short- and long-run relationships. The results suggest the existence of cointegration between CO2 emissions and its determinants. Financial development and energy consumption lead to environmental degradation, but R&D expenditures help reducing CO2 emissions. The estimated environmental effects of economic growth support the EKC hypothesis. While a U-shaped relationship is depicted between financial development and CO2 emissions, the nexus between R&D expenditures and CO2 emissions is analogues to the EKC. In the context of the efforts to tackle climate change, our findings suggest policy prescriptions by using financial development and R&D expenditures as key tools to meet the emissions target.

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)

The environmental repercussions of extensive carbon dioxide (CO2) emissions on the environment are crucial for policymakers and scholars. The repercussions of and connection between economic growth (ECG), tourism (TOUR), and foreign direct investment (FDI) on CO2 emission mitigation have been measured and argued from empirical and theoretical perspectives by scholars. Notwithstanding, the extant body of knowledge has failed to incorporate and investigate the function of governance in decarbonizing tourism activities and FDI from CO2 emissions to attain a healthy and quality environment in Africa. Hence, this current research investigates governance’s role in the reduction processes of CO2 emissions grounded in environmental Kuznets curve (EKC) conceptual assumptions for panel data spanning 2000 through 2020 for 27 African countries. This research utilized the Westerlund panel cointegration approach for the investigation of the cointegration of the selected variables. This study applied the Driscoll–Kraay regression approach for the long-term estimation. In addition, the dynamic ordinary least squares (DOLS) and the pooled mean group (PMG) were used for robustness checks. The findings of this research indicated that the governance (GOV) indicators employed have a statistically significant effect on the CO2 emission reduction. Besides, this study found that the appreciation of the income of the nations gives credence to the formation of the EKC theory and contributes to the decline in CO2 emissions within the selected African nations. The findings revealed that tourism, FDI, ECG, and GOV are positive and significant factors leading to increased CO2 emissions in Africa. Furthermore, the results showed that effective governance and control of FDI inflows and tourism activities can support decarbonization. These findings suggest the merits of governance in ensuring effective decarbonization policies of the environment, and policy suggestions are accordingly put forward.

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Probing the Effect of Governance of Tourism Development, Economic Growth, and Foreign Direct Investment on Carbon Dioxide Emissions in Africa: The African Experience

Environmental innovations, investments, and expenses have been identified as an efficient and reliable way of addressing ecological issues. Nevertheless, how environmental innovations, investments, and expenses may influence the level of environmental pollution in European nations and whether the outcome may fluctuate among various environmental innovation indicators remain to be inspected. Therefore, this research is designed to empirically scrutinize the influence of environmental innovations, environmental investment, environmental expenditure, research and development (R&D) expenses, and foreign direct investment (FDI) on renewable and non-renewable energy in a sample of 15 European countries during the period from 2005 to 2018. To achieve this, we apply robust panel econometric estimation techniques. After testing the stationary property of the series, the findings of the Pedroni cointegration test disclose the presence of a long-run stable connection among the series. The empirical results from the ARDL, FMOLS and DOLS regression show that the impact of environmental innovations, environmental expenditure, R&D expenses, and FDI help to reduce overall non-renewable energy and promote renewable energy. In contrast, environmental investment significantly increases non-renewable energy and diminishes renewable energy usage. Moreover, the findings of Dumitrescu and Hurlin's tests discover a unidirectional causality running from non-renewables and renewables towards environmental investment, environmental expenditure, and FDI. Additionally, bi-directional causality is found between environmental innovations R&D, with both non-renewable and renewable energy utilization. Furthermore, we summarize by arguing that the efforts toward efficient and sustainable use of energy by reducing the combustion of non-renewable energy sources should support modern and innovative strategies by ensuring the transformation of non-renewables with renewable energy sources.

Investigation on the causality relationship between environmental innovation and energy consumption: Empirical evidence from EU countries

In selected South Asian countries, the study intends to investigate the relationship between urban population (UP), carbon dioxide (CO2), trade openness (TO), gross domestic product (GDP), foreign direct investment (FDI), and renewable energy (RE). Fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) models for estimation were used in the study, which covered yearly data from 1990 to 2019. We used Levin–Lin–Chu, Im–Pesaran–Shin, and Fisher PP tests for the stationarity of the variables. The outcomes of the panel cointegration approach looked at whether there was a long-run equilibrium nexus between selected variables in Pakistan, Bangladesh, India, and Sri Lanka. The FMOLS approach was also used to assess the relationship, and the results suggest that there is a significant and negative nexus between FDI and renewable energy in south Asian nations. The study’s findings reveal a strong and favorable relationship between GDP and renewable energy use. In South Asian nations (Sri Lanka, Pakistan, India, and Bangladesh), the FMOLS and DOLS findings are nearly identical, but the authors used the DOLS model for robustification. According to the findings, policymakers in South Asian economies (Sri Lanka, Pakistan, India, and Bangladesh) should view GDP and FDI as fundamental policy instruments for environmental sustainability. To reduce reliance on hazardous energy sources, the government should also reassure financial sectors to participate in renewable energy.

Xueqing Kang

Papers

Does Foreign Direct Investment Influence Renewable Energy Consumption? Empirical Evidence from South Asian Countries