Trade Openness and CO 2 Emissions: The Heterogeneous and Mediating Effects for the Belt and Road Countries

Fuzhong Chen, Guohai Jiang and Getachew Kitila
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Fuzhong Chen: School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China
Guohai Jiang: School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China

Sustainability, 2021, vol. 13, issue 4, 1-16

Abstract: To investigate whether increasing trade openness results in more severe environmental problems, this study investigates the impact of trade openness on carbon dioxide (CO 2 ) emissions using panel data from 64 countries along the Belt and Road from 2001–2019. Fully considering the potential heterogeneity, the panel quantile regression approach is utilized. Moreover, this study explores the three major mediating effects of the process, namely the energy-substitution effect, economic effect, and technology effect. The empirical results indicate that the improvement in trade openness has a significantly positive effect on CO 2 emissions, and it also shows that the impact varies with different levels of CO 2 emissions. Furthermore, the indirect effect of trade openness on CO 2 emissions via the economic effect is positive, while the indirect effect via the energy-substitution and the technology effect is negative. Therefore, it is necessary to improve renewable energy consumption, decrease energy intensity, and formulate related policies to reduce carbon emissions policies in terms of local conditions.

Keywords: trade openness; CO 2 emissions; the Belt and Road; panel quantile regression; mediating effects; heterogeneity (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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