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A link between productivity, globalisation and carbon emissions: evidence from emissions by coal, oil and gas

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Abstract

Although much has been discussed about the link between renewable energy, globalisation and carbon dioxide (CO2) emissions, yet the impact of total factor productivity (TFP) on CO2 emissions is less known in the existing literature. Therefore, the present study considers TFP as one of the determinants of CO2 as it is believed that technological enhancement plays an essential role in improving the environmental quality by raising efficiency in energy use and pollution treatment. In contrast, it may also have unfavourable impacts. In particular, this study analyses how TFP along with renewable energy and globalisation affect the aggregate and source of CO2 emissions (oil, coal and gas) in the case of top ten carbon emitters from the developing economies over the period 1980–2018. To achieve the above objective, we use the second-generation panel unit root, cointegration and causality tests. We also implement a cross-sectional autoregressive distributed lag model (CS-ARDL) to find the long-run and short-run coefficients. Findings from panel cointegration tests show that there exists a significant long-run relationship between renewable energy, non-renewable energy, globalisation, total factor productivity and CO2. Moreover, findings show that renewable energy consumption has a negative and significant impact on CO2 emissions while non-renewable energy consumption significantly increases the CO2 at aggregate and disaggregated levels. Further, our results confirm that TFP increases the CO2 emissions whereas globalisation decreases CO2. From the policy point of view, TFP growth needs to be accelerated to a higher level so that it enables low carbon growth. The slower TFP growth may enhance output which requires more energy and produces more emissions. Thus, there should be a promotion of emissions’ reducing technology along with better TFP growth. Also, our findings recommend that CO2 in sample countries can be reduced through promoting low carbon technology, and globalisation.

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Notes

  1. Assume that social preferences, technology and government policies continue to progress in away and speed seen over the past few years.

  2. They have taken five dimensions of globalisation that are political, economic, social–cultural, technological and ecological.

  3. This test is used in both case balance and unbalance panels data where T < N.

  4. The test performs well while working with panel countries with T > N.

  5. Since we have discussed the environmental effect of lnTFP on carbon emission in model 1, so we do not discuss here.

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Acknowledgements

The authors gratefully acknowledge the valuable suggestions received from the Editor Prof. Roula Inglesi-Lotz and two anonymous referees on the earlier draft of this paper which substantially improved the paper. All errors are our own.

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Authors and Affiliations

  1. Department of Economics, Akal University, Talwandi Sabo, Bathinda, 151302, Punjab, India

    Mohd Arshad Ansari

  2. Economics & Business Environment Area, Indian Institute of Management Jammu, Old University Campus, Canal Road Nawabad, Cantonment, Jammu, Jammu and Kashmir, 180016, India

    Vaseem Akram

  3. School of Economics, University of Hyderabad, Hyderabad, Telangana, 500046, India

    Salman Haider

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Mohd Arshad Ansari conducted methodology, data and initial draft; Vaseem Akram conducted the literature review and final draft; Salman Haider prepares the edited the draft of the paper.

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Ansari, M., Akram, V. & Haider, S. A link between productivity, globalisation and carbon emissions: evidence from emissions by coal, oil and gas. Environ Sci Pollut Res 29, 33826–33843 (2022). https://doi.org/10.1007/s11356-022-18557-9

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