EconPapers    
Economics at your fingertips  
 

The technical decomposition of carbon emissions and the concerns about FDI and trade openness effects in the United States

Muhammad Shahbaz (), Giray Gözgör, Philip Adom () and Shawkat Hammoudeh

International Economics, 2019, issue 159, 56-73

Abstract: This paper decomposes the environmental Kuznets curve into the scale, technique and composition effects while incorporating the roles of energy consumption, trade openness and foreign direct investments (FDI) effects in a carbon emissions function for the United States (U.S.). We have incorporated information about unknown structural breaks into this function while investigating the cointegration between the related variables. The empirical results confirm the existence of cointegration between the variables in the presence of structural breaks. Moreover, the scale effect increases carbon dioxide emissions, but the technique effect reduces it as expected. Energy consumption also adds to carbon emissions, while the composition effect improves environmental quality by lowering carbon dioxide emissions. Further, trade openness decreases carbon dioxide emissions. However, increases in FDI hamper environmental quality by increasing carbon emissions. To reduce the level of carbon emissions, the technical processes of production should be improved by investing in technological innovations and capital stock and upgrading environmental regulations to channel in environment-friendly FDIs. There should also be a transformation of the energy consumption structure towards cleaner energy sources.

Keywords: Carbon emissions; Scale effect; Composition effect; Technique effect; International trade; Foreign direct investment (search for similar items in EconPapers)
JEL-codes: C33 F18 Q56 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (15) Track citations by RSS feed

Downloads: (external link)
https://www.sciencedirect.com/science/article/pii/S2110701718302221 (text/html)

Related works:
Journal Article: The technical decomposition of carbon emissions and the concerns about FDI and trade openness effects in the United States (2019) Downloads
Working Paper: The Technical Decomposition of Carbon Emissions and the Concerns about FDI and Trade Openness Effects in the United States (2019) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cii:cepiie:2019-q3-159-6

Access Statistics for this article

More articles in International Economics from CEPII research center Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2022-09-30
Handle: RePEc:cii:cepiie:2019-q3-159-6