Striving towards 2050 net zero CO2 emissions: How critical are clean energy and financial sectors?

The development of clean energy and financial sectors have been highlighted as critical factors in tackling climate change and achieving net zero emissions goals. Hence, using a dataset for the top 20 emitter countries from 1990 to 2019, this study examines whether clean energy consumption, financial development, human capital, population, and economic growth are connected with environmental quality through a reduction in carbon emissions. The long-run estimates show that renewable energy utilization, financial development, and human capital are significant in reducing CO2 emissions in the quest for net zero emissions. Contrarily, economic growth and population have a increases CO2 emissions. The results of the causality test show a two-way causality between renewable energy use, financial development, economic growth, population, and CO2 emissions. Moreover, one incidence of unidirectional causality is observed from CO2 emissions to human capital. Based on the findings, policy implications are suggested.

Potential economic indicators and environmental quality in African economies: new insight from cross-sectional autoregressive distributed lag approach.

Growing economic development and substantial demographic shifts may have a momentous consequence on environmental quality in a number of African countries. Consequently, this recent study offers the opportunity to explore the nexus among unobserved influential economic indicators and environmental quality (measured through CO2 emissions) in a panel of 26 African economies spanning from 1990 to 2018. The aggregated panel is sub-classified into net exporters (NEC) and net importers (NIC) of embodied carbon. Considering existence of cross-section reliance and heterogeneity issues, all observed series are preliminarily confirmed stationary and cointegrated. Further, key outcomes from the common correlated effect Pooled Mean Group (CCEPMG) estimator through cross-sectional autoregressive distributed lag (CSARDL) approach showed that (i) economic growth and fossil fuel energy use stimulate environmental degradation among all panels, (ii) urbanization and trade openness enhance environmental quality in NEC panel while environmental damage is increased in NIC and aggregated panels, (iii) financial development also enhanced environmental quality in the totaled and NEC panel of African countries, but rather maturated climate deterioration in NIC panel, (iv) industrialization had a substantial adverse effect on environmental quality through surge in emission of CO2 concerning the aggregated panel and NEC African states, and (v) overall the environmental Kuznets curve (EKC) conjuncture is validated among all panels. The findings were also affirmed by Augmented Mean Group (AMG) technique. Finally, Dumitrescu-Hurlin Granger causality checks showed strong causal affiliations heterogeneously across all panels. From the policy perspective, the analytical outcomes from this study summarily encourage the introduction of profitable policies that can facilitate green energy and economic structural change to diminish the degree of environmental degradation from emission of CO2. Steps to strengthen a low-carbon and sustainable green environment should therefore collectively address these factors during policy growth.

Environmental pollution of China to foreign investors: detrimental or beneficial?

This study investigates the dynamic linkage among foreign direct investment, energy consumption, and environmental pollution of China spanning from 1990 to 2014. Despite the extant literature on the FDI-energy-growth-environmental pollution nexus, most of the conclusion seems inconsistent. Hence, this study utilized recent econometric techniques such as the dynamic ordinary least square (DOLS), autoregressive distributed lag (ARDL) bounds test approach, Gregory and Hansen structural cointegration, and the bootstrap Granger causality. The study also disaggregated energy consumption into various sources to identify their respective distinct impact on the environment. Our study confirmed the presence of the EKC curve for China in a quadratic equation applying the DOLS. The result of the bootstrapped Granger causality confirmed the presence of a unidirectional Granger causality running from CO2 emission to economic growth and export; non-renewable energy to economic growth, export to economic growth, and renewable energy; and urbanization to economic growth. Moreover, our study recognized the presence of a bi-directional connection between FDI and economic growth. Our study highly recommends that China modify its energy mix by incorporating more renewable energy resources such as hydro, wind, geothermal. Additionally, the regulatory bodies should strictly implement improved energy efficiency in the various sectors that complement total proper urban land usage as the urban population to total population significantly impelled an upsurge in environmental deterioration in China.