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

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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)

  • Getachew Magnar Kitila

    (School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China)

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.

Suggested Citation

  • Fuzhong Chen & Guohai Jiang & Getachew Magnar Kitila, 2021. "Trade Openness and CO 2 Emissions: The Heterogeneous and Mediating Effects for the Belt and Road Countries," Sustainability, MDPI, vol. 13(4), pages 1-16, February.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:4:p:1958-:d:497864
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