Do renewable energy sources perfectly displace non-renewable energy sources? Evidence from Asia-Pacific economies.

The existing scholarly discourse surrounding the energy transition has long operated on the assumption of perfect displacement of non-renewable energy. However, an evolving set of studies highlights an intricate web of inefficiencies and complexities that prevent the perfect displacement of fossil fuel energy with renewable energy production. Since this could carry serious implications for the environmental targets of several economies, it is crucial to accurately and continuously measure the actual extent of fossil fuel displacement. Within this framework, this study empirically investigates the extent of non-renewable energy displacement by renewable energy for a balanced panel of seven Asia-Pacific (APAC) countries between 1989 and 2015. The outcome function also controls for globalisation, real GDP per capita, and crude oil prices. After implementing the necessary diagnostics, the panel cointegration establishes a significant long-run relationship among the selected variables. The PMG-ARDL estimation indicates that renewable energy production and globalisation significantly reduce the fossil fuel energy production, whereas real GDP per capita and crude oil prices induce it positively. However, the coefficient of renewable energy production is only - 0.39, indicating that more than 2.5 units of renewable electricity are necessary to displace a unit of non-renewable energy. As such, this study concludes that the current energy transition in Asia-Pacific region is not perfect. These results are robust to the usage of the FGLS estimation technique. The study suggests the adoption of a new energy transition that allows greater displacement of fossil fuel energy as well as gradual reduction in overall energy use.

Does environmental policy stringency improve nature's health in BRICS economies? Implications for sustainable development.

In our groundbreaking exploration, we meticulously delve into the relationship between environmental policy stringency, international trade dynamics, and financial openness within the BRICS group (Brazil, Russia, India, China, and South Africa) spanning from 1996 to 2021. With a focus on critical variables such as economic growth and technological innovation, our empirical findings challenge conventional wisdom. Surprisingly, we found that those stringent environmental policies, when standing alone, do not invariably lead to reduce CO2 emissions. Equally interesting is our startling discovery that the anticipated moderating influence of environmental policy stringency, catalyzed by trade and foreign direct investment, on the well-being of our environment does not materialize; contrarily, both trade and foreign direct investment moderating channels exhibit unanticipated positive correlations with CO2 emissions. These revelations provoke us with the presence of a "pollution haven" phenomenon within the BRICS economies. Furthermore, our investigation reveals that, when examined individually, trade and foreign direct investment also appear to contribute to elevated emission levels. These findings provide a resolute solution to our research quandary, underlining the indispensable requirement for cutting-edge and robust environmental policies. These policies must possess the prowess to effectively counteract the adverse environmental consequences stemming from the amalgamation of global trade and financial integration. In doing so, they shall propel BRICS nations toward a future firmly grounded in principles of sustainability and ecological integrity.

The role of environmental degradation in macroeconomic instability: panel evidence from emerging economies.

This study examines the role of environmental degradation in macroeconomic instability for a balanced panel sample of 22 emerging market economies from 1996 to 2019. Governance is included in the macroeconomic instability function as a moderating factor. Besides, bank credit and government spending are also included in the estimated function as control variables. The long-run results from using the PMG-ARDL method show that environmental degradation and bank credit induce macroeconomic instability, whereas governance and government spending reduce it. Interestingly, environmental degradation creates greater macroeconomic instability than the bank credit. We also find that governance being a moderating factor weakens the adverse impact of environmental degradation on macroeconomic instability. These findings are robust to the FGLS technique, suggesting that governments in emerging economies should prioritize environmental degradation and governance in mitigating climate change and ensuring macroeconomic stability in the long run.

Effects of foreign aid and energy aid inflows on renewable and non-renewable electricity production in BRICS countries.

We empirically examine the effects of overseas aggregate aid and energy aid inflows on renewable and non-renewable electricity production in selected BRICS countries (i.e., Brazil, India, China, and South Africa) from 1995 to 2015. Economic growth, foreign direct investment inflows, and trade openness are control variables in electricity production functions. The results from employing fully modified ordinary least square and dynamic OLS techniques indicate that economic growth, inflows of aggregate aid, energy aid, and foreign direct investment promote renewable electricity production, while trade openness reduces it. We also find that aggregate aid and energy aid inflows reduce the non-renewable electricity production, while economic growth, foreign direct investment inflows, and trade openness promote it. Moreover, our study is unique and adopts different panel estimators, ensuring the robustness of the research findings. Our findings suggest that the BRICS economies' march towards a sustainable environment becomes possible if policymakers, in their climate mitigation policy, encourage greater investments of overseas aggregate aid and energy aid inflows toward renewable electricity production.

The impact of economic complexity on energy demand in OECD countries.

This paper investigates the role of economic complexity on energy demand using the panel dataset of 25 Organization for Economic Co-operation and Development (OECD) countries from 1978 to 2016. Both real per capita income level and economy-wide real energy price index are critical determinants in energy demand modeling. The battery of the cross-sectional dependency test proposed by Pesaran (2004 and 2007) is used, signaling the presence of cross-sectional dependency in the dataset. Thus, the Westerlund (2007) cointegration test is also used, revealing the long-run relationship between the series. Moreover, the results from using the Augmented Mean Group (AMG) estimations illustrate that real per capita income level positively affects energy demand while real energy price and economic complexity negatively influence on it. From a policy perspective, we suggest increasing technological innovation (i.e., higher economic complexity) will reduce the energy demand. The reduction of massive energy usage may be beneficial for the natural environment's health in the OECD countries.

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 4th industrial revolution and global decarbonisation are frequently referred to as two interrelated megatrends. Particularly, where the 4th industrial revolution is expected to fundamentally change the economy, society, and financial systems, it may also create opportunities for a zero-carbon future. Therefore, in the context of 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. Employing the bootstrapping bounds testing approach to examine short- and long-run relationships, our analysis is based on historical data from 1870 to 2017. 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 to reduce CO2 emissions. The estimated environmental effects of economic growth support the EKC hypothesis. While a U-shaped relationship is found 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 the key tools to meet the emissions target.

Is skewed income distribution good for environmental quality? A comparative analysis among selected BRICS countries.

A large number of studies have examined the linkage between income inequality and environmental quality at the individual country levels. This study attempts to examine the linkage between the two factors for the individual BRICS economies from a comparative perspective, which is scarce in the literature. It examines the selected countries (Brazil, India, China and South Africa) by endogenising the patterns of primary energy consumption (coal use and petroleum use), total primary energy consumption, economic growth, and urbanisation as key determining factors in CO2 emission function. The long-run results based on ARDL bounds testing revealed that income inequality leads to increase in CO2 emissions for Brazil, India and China, while the same factor leads to reduction in CO2 emissions for South Africa. However, it observes that while coal use increases CO2 emissions for India, China and South Africa, it has no effect for Brazil. In contrast, the use of petroleum products contributes to CO2 emissions in Brazil, while the use of the same surprisingly results in reduction of carbon emissions in South Africa, India and China. The findings suggest that given the significance of income inequality in environmental pollution, the policy makers in these emerging economies have to take into consideration the role of income inequality, while designing the energy policy to achieve environmental sustainability.