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Using Quantile Regression to Analyze the Relationship between Socioeconomic Indicators and Carbon Dioxide Emissions in G20 Countries

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  • Abdulaziz A. Alotaibi

    (Public Administration Department, College of Business Administration, King Saud University, Riyadh 11543, Saudi Arabia)

  • Naif Alajlan

    (Computer Engineering Department, College of Computer and Information Sciences, King Saud University, Riyadh 11543, Saudi Arabia)

Abstract

Numerous studies addressed the impacts of social development and economic growth on the environment. This paper presents a study about the inclusive impact of social and economic factors on the environment by analyzing the association between carbon dioxide (CO 2 ) emissions and two socioeconomic indicators, namely, Human Development Index (HDI) and Legatum Prosperity Index (LPI), under the Environmental Kuznets Curve (EKC) framework. To this end, we developed a two-stage methodology. At first, a multivariate model was constructed that accurately explains CO 2 emissions by selecting the appropriate set of control variables based on model quality statistics. The control variables include GDP per capita, urbanization, fossil fuel consumption, and trade openness. Then, quantile regression was used to empirically analyze the inclusive relationship between CO 2 emissions and the socioeconomic indicators, which revealed many interesting results. First, decreasing CO 2 emissions was coupled with inclusive socioeconomic development. Both LPI and HDI had a negative marginal relationship with CO 2 emissions at quantiles from 0.2 to 1. Second, the EKC hypothesis was valid for G20 countries during the study period with an inflection point around quantile 0.15. Third, the fossil fuel consumption had a significant positive relation with CO 2 emissions, whereas urbanization and trade openness had a negative relation during the study period. Finally, this study empirically indicates that effective policies and policy coordination on broad social, living, and economic dimensions can lead to reductions in CO 2 emissions while preserving inclusive growth.

Suggested Citation

  • Abdulaziz A. Alotaibi & Naif Alajlan, 2021. "Using Quantile Regression to Analyze the Relationship between Socioeconomic Indicators and Carbon Dioxide Emissions in G20 Countries," Sustainability, MDPI, vol. 13(13), pages 1-12, June.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:13:p:7011-:d:579878
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    Cited by:

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    2. Qianxiao Zhang & Syed Asif Ali Naqvi & Syed Ale Raza Shah, 2021. "The Contribution of Outward Foreign Direct Investment, Human Well-Being, and Technology toward a Sustainable Environment," Sustainability, MDPI, vol. 13(20), pages 1-29, October.
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    More about this item

    Keywords

    CO 2 emissions; socioeconomic indicators; G20 countries; EKC hypothesis; inclusive development; climate change;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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