IDEAS home Printed from https://ideas.repec.org/a/spr/endesu/v26y2024i2d10.1007_s10668-022-02888-1.html
   My bibliography  Save this article

Renewable energy, fiscal policy and load capacity factor in BRICS countries: novel findings from panel nonlinear ARDL model

Author

Listed:
  • Tomiwa Sunday Adebayo

    (Cyprus International University)

  • Ahmed Samour

    (Dhofar University)

Abstract

In this paper, we assess the effects of fiscal policy on load capacity factor using data spanning from 1990 to 2018 in BRICS nations (Brazil, Russia, China, India, and South Africa). Unlike both CO2 emissions and ecological footprint, the load capacity factor captures both the demand and supply sides of the environment. This research leverages on co-integration test, second-generation unit root tests, and the novel panel nonlinear autoregressive distributed lag (PNARDL). The results revealed that the major contributors to environmental deterioration are economic expansion and nonrenewable energy, while environmental sustainability is attributed to increased renewable energy. Furthermore, a positive shock in taxation revenue increases the quality of the environment while positive (negative) shocks in government expenditure decrease environmental quality. In affirming the PNARDL testing approach findings, the current study employed the pool mean group (PMG) and mean group (MG) estimators to assess the linkage between the independent and dependent variables. The results of the MG and PMG estimators align with the panel nonlinear ARDL results. Besides, the panel causality test also revealed unidirectional causality from renewable energy, nonrenewable energy, economic growth, government expenditure, and taxation revenues to load capacity factor. These findings affirm the findings of the PNARDL testing approach. The study suggests that the BRICS nations’ governments should use the fiscal policy to enhance ecological sustainability by promoting investment and projects in renewable sources.

Suggested Citation

  • Tomiwa Sunday Adebayo & Ahmed Samour, 2024. "Renewable energy, fiscal policy and load capacity factor in BRICS countries: novel findings from panel nonlinear ARDL model," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(2), pages 4365-4389, February.
    • Handle: RePEc:spr:endesu:v:26:y:2024:i:2:d:10.1007_s10668-022-02888-1
    DOI: 10.1007/s10668-022-02888-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10668-022-02888-1
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10668-022-02888-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Shang, Yunfeng & Razzaq, Asif & Chupradit, Supat & Binh An, Nguyen & Abdul-Samad, Zulkiflee, 2022. "The role of renewable energy consumption and health expenditures in improving load capacity factor in ASEAN countries: Exploring new paradigm using advance panel models," Renewable Energy, Elsevier, vol. 191(C), pages 715-722.
    2. Pedroni, Peter, 2004. "Panel Cointegration: Asymptotic And Finite Sample Properties Of Pooled Time Series Tests With An Application To The Ppp Hypothesis," Econometric Theory, Cambridge University Press, vol. 20(3), pages 597-625, June.
    3. Jacobs, Bas & de Mooij, Ruud A., 2015. "Pigou meets Mirrlees: On the irrelevance of tax distortions for the second-best Pigouvian tax," Journal of Environmental Economics and Management, Elsevier, vol. 71(C), pages 90-108.
    4. Destek, Mehmet & Sinha, Avik, 2020. "Renewable, non-renewable energy consumption, economic growth, trade openness and ecological footprint: Evidence from organisation for economic Co-operation and development countries," MPRA Paper 104246, University Library of Munich, Germany, revised 2020.
    5. Samour, Ahmed & Shahzad, Umer & Mentel, Grzegorz, 2022. "Moving toward sustainable development: Assessing the impacts of taxation and banking development on renewable energy in the UAE," Renewable Energy, Elsevier, vol. 200(C), pages 706-713.
    6. Hashem Pesaran, M. & Yamagata, Takashi, 2008. "Testing slope homogeneity in large panels," Journal of Econometrics, Elsevier, vol. 142(1), pages 50-93, January.
    7. Joakim Westerlund, 2007. "Testing for Error Correction in Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(6), pages 709-748, December.
    8. Metcalf, Gilbert E., 2003. "Environmental levies and distortionary taxation:: Pigou, taxation and pollution," Journal of Public Economics, Elsevier, vol. 87(2), pages 313-322, February.
    9. Fareed, Zeeshan & Rehman, Mubeen Abdur & Adebayo, Tomiwa Sunday & Wang, Yihan & Ahmad, Munir & Shahzad, Farrukh, 2022. "Financial inclusion and the environmental deterioration in Eurozone: The moderating role of innovation activity," Technology in Society, Elsevier, vol. 69(C).
    10. Ugur Korkut Pata, 2021. "Do renewable energy and health expenditures improve load capacity factor in the USA and Japan? A new approach to environmental issues," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(9), pages 1427-1439, December.
    11. Bashir, Muhammad Farhan & MA, Benjiang & Shahbaz, Muhammad & Shahzad, Umer & Vo, Xuan Vinh, 2021. "Unveiling the heterogeneous impacts of environmental taxes on energy consumption and energy intensity: Empirical evidence from OECD countries," Energy, Elsevier, vol. 226(C).
    12. Balsalobre, Daniel & Sinha, Avik & Driha, Oana M. & Shujaat Mubarik, Muhammad, 2021. "Assessing the Impacts of Ageing and Natural Resource Extraction on Carbon Emissions: A proposed Policy Framework for European Economies," MPRA Paper 108159, University Library of Munich, Germany, revised 2021.
    13. Mahmood, Ahmad & Zahoor, Ahmed & Xiyue, Yang & Nazim, Hussain & Sinha, Avik, 2021. "Financial development and environmental degradation: Do human capital and institutional quality make a difference?," MPRA Paper 110039, University Library of Munich, Germany, revised 2021.
    14. Haider Mahmood & Anass Hamadelneel Adow & Muzafar Abbas & Asim Iqbal & Muntasir Murshed & Maham Furqan, 2022. "The Fiscal and Monetary Policies and Environment in GCC Countries: Analysis of Territory and Consumption-Based CO 2 Emissions," Sustainability, MDPI, vol. 14(3), pages 1-13, January.
    15. Chien, Fengsheng & Ananzeh, Mohammed & Mirza, Farhan & Bakar, Abou & Vu, Hieu Minh & Ngo, Thanh Quang, 2021. "The effects of green growth, environmental-related tax, and eco-innovation towards carbon neutrality target in the US economy," MPRA Paper 109664, University Library of Munich, Germany.
    16. Pesaran, H. Hashem & Shin, Yongcheol, 1998. "Generalized impulse response analysis in linear multivariate models," Economics Letters, Elsevier, vol. 58(1), pages 17-29, January.
    17. Pesaran, M. Hashem & Smith, Ron, 1995. "Estimating long-run relationships from dynamic heterogeneous panels," Journal of Econometrics, Elsevier, vol. 68(1), pages 79-113, July.
    18. Pata, Ugur Korkut & Isik, Cem, 2021. "Determinants of the load capacity factor in China: A novel dynamic ARDL approach for ecological footprint accounting," Resources Policy, Elsevier, vol. 74(C).
    19. Fareed, Zeeshan & Pata, Ugur Korkut, 2022. "Renewable, non-renewable energy consumption and income in top ten renewable energy-consuming countries: Advanced Fourier based panel data approaches," Renewable Energy, Elsevier, vol. 194(C), pages 805-821.
    20. Adebayo, Tomiwa Sunday & Onifade, Stephen Taiwo & Alola, Andrew Adewale & Muoneke, Obumneke Bob, 2022. "Does it take international integration of natural resources to ascend the ladder of environmental quality in the newly industrialized countries?," Resources Policy, Elsevier, vol. 76(C).
    21. Anwar, Ahsan & Sharif, Arshian & Fatima, Saba & Ahmad, Paiman & Sinha, Avik & Khan, Syed Abdul Rehman & Jermsittiparsert, Kittisak, 2021. "The asymmetric effect of public private partnership investment on transport CO2 emission in China: Evidence from quantile ARDL approach," MPRA Paper 108160, University Library of Munich, Germany, revised 2021.
    22. Abbasi, Kashif Raza & Shahbaz, Muhammad & Zhang, Jinjun & Irfan, Muhammad & Alvarado, Rafael, 2022. "Analyze the environmental sustainability factors of China: The role of fossil fuel energy and renewable energy," Renewable Energy, Elsevier, vol. 187(C), pages 390-402.
    23. Usama Al-Mulali & Sakiru Solarin & Ilhan Ozturk, 2016. "Investigating the presence of the environmental Kuznets curve (EKC) hypothesis in Kenya: an autoregressive distributed lag (ARDL) approach," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 80(3), pages 1729-1747, February.
    24. Timilsina, Govinda R. & Dulal, Hari B., 2008. "Fiscal policy instruments for reducing congestion and atmospheric emissions in the transport sector : a review," Policy Research Working Paper Series 4652, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sinan Erdogan, 2024. "Linking natural resources and environmental sustainability: A panel data approach based on the load capacity curve hypothesis," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(4), pages 3182-3194, August.
    2. Ugur Korkut Pata & Banu Tanriover, 2023. "Is the Load Capacity Curve Hypothesis Valid for the Top Ten Tourism Destinations?," Sustainability, MDPI, vol. 15(2), pages 1-15, January.
    3. Ni, Zehua & Yang, Jingyi & Razzaq, Asif, 2022. "How do natural resources, digitalization, and institutional governance contribute to ecological sustainability through load capacity factors in highly resource-consuming economies?," Resources Policy, Elsevier, vol. 79(C).
    4. Zhou, Hui & Awosusi, Abraham Ayobamiji & Dagar, Vishal & Zhu, Guohua & Abbas, Shujaat, 2023. "Unleashing the asymmetric effect of natural resources abundance on carbon emissions in regional comprehensive economic partnership: What role do economic globalization and disaggregating energy play?," Resources Policy, Elsevier, vol. 85(PA).
    5. Wei, Haoqiang & Yue, Guiling & Khan, Noor Ullah, 2024. "Uncovering the impact of Fintech, Natural Resources, Green Finance and Green Growth on Environment sustainability in BRICS: An MMQR analysis," Resources Policy, Elsevier, vol. 89(C).
    6. Zhou, Anhua & Li, Jun, 2022. "How do trade liberalization and human capital affect renewable energy consumption? Evidence from the panel threshold model," Renewable Energy, Elsevier, vol. 184(C), pages 332-342.
    7. Sami Ullah & Rundong Luo & Tomiwa Sunday Adebayo & Mustafa Tevfik Kartal, 2024. "Paving the ways toward sustainable development: the asymmetric effect of economic complexity, renewable electricity, and foreign direct investment on the environmental sustainability in BRICS-T," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(4), pages 9115-9139, April.
    8. Han, Guixin & Cai, Xuesen, 2024. "The linkages among natural resources, sustainable energy technologies and human capital: An evidence from N-11 countries," Resources Policy, Elsevier, vol. 90(C).
    9. Li, Jinlong & Shi, Yang & Song, Xiaowei, 2024. "The dynamics of digitalization and natural resources in shaping the sustainable development agenda in BRICS-T nations," Resources Policy, Elsevier, vol. 91(C).
    10. Shang, Yunfeng & Razzaq, Asif & Chupradit, Supat & Binh An, Nguyen & Abdul-Samad, Zulkiflee, 2022. "The role of renewable energy consumption and health expenditures in improving load capacity factor in ASEAN countries: Exploring new paradigm using advance panel models," Renewable Energy, Elsevier, vol. 191(C), pages 715-722.
    11. Jahanger, Atif & Yu, Yang & Hossain, Mohammad Razib & Murshed, Muntasir & Balsalobre-Lorente, Daniel & Khan, Uzma, 2022. "Going away or going green in NAFTA nations? Linking natural resources, energy utilization, and environmental sustainability through the lens of the EKC hypothesis," Resources Policy, Elsevier, vol. 79(C).
    12. Francisco García-Lillo & Eduardo Sánchez-García & Bartolomé Marco-Lajara & Pedro Seva-Larrosa, 2023. "Renewable Energies and Sustainable Development: A Bibliometric Overview," Energies, MDPI, vol. 16(3), pages 1-22, January.
    13. Jin, Taeyoung, 2022. "Impact of heat and electricity consumption on energy intensity: A panel data analysis," Energy, Elsevier, vol. 239(PA).
    14. Usman Mehmood, 2024. "Assessing the Impacts of Eco-innovations, Economic Growth, Urbanization on Ecological Footprints in G-11: Exploring the Sustainable Development Policy Options," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(4), pages 16849-16867, December.
    15. Halmat Omer & Murad Bein, 2022. "Does the Moderating Role of Financial Development on Energy Utilization Contributes to Environmental Sustainability in GCC Economies?," Energies, MDPI, vol. 15(13), pages 1-16, June.
    16. Yang, Shuangpeng & umar, Muhammad, 2022. "How globalization is reshaping the environmental quality in G7 economies in the presence of renewable energy initiatives?," Renewable Energy, Elsevier, vol. 193(C), pages 128-135.
    17. Bashir, Muhammad Adnan & Dengfeng, Zhao & Filipiak, Beata Zofia & Bilan, Yuriy & Vasa, László, 2023. "Role of economic complexity and technological innovation for ecological footprint in newly industrialized countries: Does geothermal energy consumption matter?," Renewable Energy, Elsevier, vol. 217(C).
    18. Saqib, Najia & Shahzad, U., 2024. "Pathways to sustainability: Evaluating the impact of green energy, natural resources, FinTech, and environmental policies in resource-abundant countries," Resources Policy, Elsevier, vol. 97(C).
    19. Muhammad Azam & Zia Ur Rehman & Yusnidah Ibrahim, 2022. "Causal nexus in industrialization, urbanization, trade openness, and carbon emissions: empirical evidence from OPEC economies," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(12), pages 13990-14010, December.
    20. Zhao, Xinlu & Adebayo, Tomiwa Sunday & Kong, Xianli & Al-Faryan, Mamdouh Abdulaziz Saleh, 2022. "Relating energy innovations and natural resources as determinants of environmental sustainability: The role of globalization in G7 countries," Resources Policy, Elsevier, vol. 79(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:endesu:v:26:y:2024:i:2:d:10.1007_s10668-022-02888-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.