The dynamic heterogeneous impacts of nonrenewable energy, trade openness, total natural resource rents, financial development and regulatory quality on environmental quality: Evidence from BRICS economies
Ridwan Lanre Ibrahim and
Kazeem Ajide ()
Resources Policy, 2021, vol. 74, issue C
This study investigates the dynamic impacts of disaggregated nonrenewable energy, trade openness, total natural resource rents, financial development and regulatory quality on environment quality of the BRICS economies from 1996 to 2018. To track the channel through which nonrenewable energy impacts the environment, the study explores the data on both production and consumption for coal, gas and fuel while import and export of goods and services are separately used to proxy trade openness. The empirical analyses are based on preliminary tests, comprising of descriptive statistics, normality tests, cross-sectional dependence test and slope heterogeneity test. Panel unit root tests based on first and second generations are equally employed before conducting panel cointegration test. Estimation of empirical models is based on second-generation techniques comprising Augmented Mean Group (AMG) and Common Correlated Effect Mean Group (CCEMG). The following findings are evident. First, coal and fuel from both angles of production and consumption and gas production are found to be carbon emission per capita (co2pc) inducing while gas consumption turns out to be co2pc-abating. Second, the trade led environmental impacts are not supported. Third, total natural resource rents, financial development and regulatory quality are found to positively contribute to surge in co2pc. Fourth, the results of causality test based on Dumitrescu and Hurlin reveal the case of bi-directional and uni-directional among the variables. The emanating policy implications suggest gas promotion and discouragement of coal and fuel adoption as strategies to improving environmental quality in BRICS.
Keywords: Nonrenewable energy; Trade openness; Total natural resource rents; Financial development; Regulatory quality; Environmental quality (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:74:y:2021:i:c:s0301420721002622
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