Reinvestigating the pollution haven hypothesis: the nexus between foreign direct investments and environmental quality in G-20 countries.

One of the most commonly debated concerns regarding foreign direct investment inflows is the associated environmental adversities that accompany the influx of foreign funds. As a result, assessing the environmental impacts of foreign direct investment inflows is necessary for achieving environmentally friendly economic growth in the contemporary era. Accordingly, the global economies including the members of the Group of Twenty (G-20) should focus on attracting clean foreign direct investments. Against this backdrop, controlling for energy consumption and urbanization, this extant study scrutinizes the effects of foreign direct investment inflows on the carbon dioxide emission figures of selected G-20 countries between 1992 and 2018. The econometric analysis conducted in this paper involves recently developed methods that are efficient in handling cross-sectionally dependent heterogeneous panel data sets. Besides, the analysis is also conducted for sub-panels of high-, upper-middle-, and lower-middle-income G-20 countries to evaluate the possible heterogeneous environmental effects across the G-20 countries belonging to different income levels. Overall, the results highlight that higher foreign direct investment inflows surge carbon dioxide emissions whereby the pollution haven hypothesis is evidenced to hold for the G-20 nations of concern. Similarly, both at the aggregated and disaggregated levels, greater consumption of energy is witnessed to boost carbon dioxide emissions in the long run. Moreover, urbanization is found to trigger carbon dioxide emissions for the G-20 nations overall and the lower-middle-income G-20 nations. Further, the causality analysis reveals that carbon dioxide emissions have bidirectional causal relationships with foreign direct investment inflows, energy consumption, and urbanization. In line with these major findings, this study recommends that the governments of the G-20 countries inhibit inflows of dirty foreign direct investments, reduce fossil fuel dependency, and adopt green urbanization policies for achieving higher economic growth without marginalizing environmental well-being.

Green investments, financial development, and environmental quality in Ghana: evidence from the novel dynamic ARDL simulations approach.

Numerous studies have examined the influence of macroeconomic factors on environmental quality in Ghana. However, to the best of our knowledge, there has been no study on the connection between green investments, financial development, and environmental quality in the context of this Sub-Saharan African country. This study was therefore conducted to help fill this gap using annual frequency time series data ranging from 1970 to 2018. In attaining the objectives of this study, robust econometric techniques were employed. From the results, all the variables were first differenced stationary and cointegrated in the long run. The dynamic ARDL simulations technique with the support of the ARDL estimator was employed to examine the elastic effects of the predictors on the response variable, and from the discoveries, green investments improved environmental quality in Ghana both in the long and the short run via carbon dioxide mitigations. However, in both the long and the short run, financial development and energy utilization had a detrimental influence on environmental quality due to their positive influence on carbon dioxide emissions. Moreover, the N-shaped association between national income and environmental pollution was validated for Ghana. On the causal directions amidst the variables, there was no causality between green investments and environmental degradation was evidenced; however, a bidirectional causality between financial development and environmental pollution was also discovered. Also, unidirectional causalities running from national income and energy consumption to environmental degradation were discovered. Based on the findings, the study recommend that investments in green sources should be intensified to help improve environmental quality in Ghana. Furthermore, improving developments in the financial sector is a vital means through which the country could attain its sustainable development goals.

Financial development and environmental sustainability in West Africa: evidence from heterogeneous and cross-sectionally correlated models.

Although West African nations are flourishing economically of late, they still have environmental issues due to the high rate of emissions in the bloc. Despite the worsening environmental condition, there have been limited studies on the causal agents of this situation in the region. Therefore, drawing strength from the United Nations' Sustainable Development Goals (SDGs) and their targeted impacts of 2030, this study explored the nexus between financial development and environmental sustainability in West Africa (WA) for the period 1990 to 2016. The cross-sectional autoregressive distributed lag (CS-ARDL) estimator alongside the cross-sectionally augmented distributed lag (CS-DL) and the cross-sectional augmented error correction (CAEC) estimators were engaged to examine the elastic effects of the explanatory variables on the explained variable and from the results, financial development was harmful to environmental sustainability in WA through high carbon emissions. Also, control variables foreign direct investments, energy consumption, industrialization, and population growth were detrimental to the sustainability of the environment. On the causal connections amid the series, a unidirectional causality from financial development and population growth to carbon emissions was uncovered. Also, feedback causalities between foreign direct investments and carbon emissions, between energy consumption and the effluents of carbon, and between industrialization and environmental pollution were unraveled. Based on the findings, the study recommended among others that the countries should integrate environmental welfare objectives into their financial development policies. Also, the nations should ensure that their citizens have access to energy that is affordable, reliable, sustainable, and modern (SDG 7). Finally, improvement in energy efficiency, sustainable infrastructure, and good use of resources (SDG 12) should be promoted by the nations. The above recommendations if seriously taken into consideration will help the region to combat climate change and its impacts, which is the focus of SDG 13. The main flaw of this exploration was the lack of data for some specific time periods. Therefore, in future when such data become available, similar investigations could be carried out to confirm the robustness of the study's results.