IDEAS home Printed from https://ideas.repec.org/a/wly/sustdv/v31y2023i1p307-320.html
   My bibliography  Save this article

Can energy productivity gains harness the carbon dioxide‐inhibiting agenda of the Next 11 countries? Implications for achieving sustainable development

Author

Listed:
  • Muntasir Murshed
  • Uzma Khan
  • Aarif Mohammad Khan
  • Ilhan Ozturk

Abstract

The Next 11 countries are among the world's most rapidy emerging economies that are poised to becoming key drivers of the global economy. Nonetheless, despite progressing economically, these nations have experienced persistent deterioration in their environmental conditions. Hence, this study specifically investigates whether energy productivity gains, controlling for financial inclusion, renewable energy use, economic growth, international trade, and urbanization, can harness the carbon dioxide emissions (CO2E)‐inhibiting objectives of the Next 11 countries. The empirical analysis, using annual data spanning from 2004 to 2020, involves the application of advanced econometric tools that are robust to handling the cross‐sectional dependency and slope heterogeneity‐related issues. The results from the econometric analysis indicate that although energy productivity gains and greater renewable energy consumption reduce emissions of carbon dioxide, making the financial system more inclusive tends to amplify the emission levels. More importantly, energy productivity gains and financial inclusion are observed to jointly reduce the CO2E figures of the Next 11 countries. Thus, it can be said that making more productive use of energy can, to some extent, neutralize the adverse environmenntal impacts of financial inclusion. Additionally, higher economic growth, greater international trade participation, and urbanization are evidenced to boost CO2E in these countries while higher renewable energy use is observed to curb the emission levels. Furthermore, heterogeneous country‐specific outcomes are also witnessed. In particular, energy productivity improvement is seen to curb CO2E in eight of these nations while a simultaneous rise in the levels of energy productivity and financial inclusion is found to jointly mitigate and boost CO2E in 55% and 18% of the Next 11 nations, respectively. Hence, in line with these key findings, a set of critically important environmental development‐related policies are suggested.

Suggested Citation

  • Muntasir Murshed & Uzma Khan & Aarif Mohammad Khan & Ilhan Ozturk, 2023. "Can energy productivity gains harness the carbon dioxide‐inhibiting agenda of the Next 11 countries? Implications for achieving sustainable development," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 307-320, February.
    • Handle: RePEc:wly:sustdv:v:31:y:2023:i:1:p:307-320
    DOI: 10.1002/sd.2393
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/sd.2393
    Download Restriction: no
    File URL: https://libkey.io/10.1002/sd.2393?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
    ---><---

    References listed on IDEAS

    as
    1. Rehman, Mobeen Ur & Rashid, Mushab, 2017. "Energy consumption to environmental degradation, the growth appetite in SAARC nations," Renewable Energy, Elsevier, vol. 111(C), pages 284-294.
    2. Zhao, Bingyu & Yang, Wanping, 2020. "Does financial development influence CO2 emissions? A Chinese province-level study," Energy, Elsevier, vol. 200(C).
    3. Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
    4. Muhammad Shahbaz & Avik Sinha, 2019. "Environmental Kuznets curve for CO2emissions: a literature survey," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 46(1), pages 106-168, January.
    5. M. Hashem Pesaran, 2021. "General diagnostic tests for cross-sectional dependence in panels," Empirical Economics, Springer, vol. 60(1), pages 13-50, January.
    6. Olimpia Neagu, 2019. "The Link between Economic Complexity and Carbon Emissions in the European Union Countries: A Model Based on the Environmental Kuznets Curve (EKC) Approach," Sustainability, MDPI, vol. 11(17), pages 1-27, August.
    7. Hashem Pesaran, M. & Yamagata, Takashi, 2008. "Testing slope homogeneity in large panels," Journal of Econometrics, Elsevier, vol. 142(1), pages 50-93, January.
    8. Li, Jinchao & Wang, Lina & Lin, Xiaoshan & Qu, Shen, 2020. "Analysis of China’s energy security evaluation system: Based on the energy security data from 30 provinces from 2010 to 2016," Energy, Elsevier, vol. 198(C).
    9. 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.
    10. Shahbaz, Muhammad & Sinha, Avik, 2019. "Environmental Kuznets Curve for CO2 emission: A survey of empirical literature," MPRA Paper 100257, University Library of Munich, Germany, revised 2019.
    11. Yunpeng Sun & Asif Razzaq, 2022. "Composite fiscal decentralisation and green innovation: Imperative strategy for institutional reforms and sustainable development in OECD countries," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(5), pages 944-957, October.
    12. Kim, Dai-Won & Yu, Jung-Suk & Hassan, M. Kabir, 2018. "Financial inclusion and economic growth in OIC countries," Research in International Business and Finance, Elsevier, vol. 43(C), pages 1-14.
    13. Ghimire, Laxman Prasad & Kim, Yeonbae, 2018. "An analysis on barriers to renewable energy development in the context of Nepal using AHP," Renewable Energy, Elsevier, vol. 129(PA), pages 446-456.
    14. Ertugrul, Hasan Murat & Çetin, Murat & Şeker, Fahri & Dogan, Eyüp, 2015. "The impact of trade openness on global carbon dioxide emissions: Evidence from the top ten emitters among developing countries," MPRA Paper 97539, University Library of Munich, Germany, revised 10 Mar 2016.
    15. Dong, Kangyin & Hochman, Gal & Zhang, Yaqing & Sun, Renjin & Li, Hui & Liao, Hua, 2018. "CO2 emissions, economic and population growth, and renewable energy: Empirical evidence across regions," Energy Economics, Elsevier, vol. 75(C), pages 180-192.
    16. Robina Iram & Muhammad Khalid Anser & Rehmat Ullah Awan & Amjad Ali & Qaiser Abbas & Imran Sharif Chaudhry, 2021. "Prioritization Of Renewable Solar Energy To Prevent Energy Insecurity: An Integrated Role," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 66(02), pages 391-412, March.
    17. Francis Teal & Markus Eberhardt, 2010. "Productivity Analysis in Global Manufacturing Production," Economics Series Working Papers 515, University of Oxford, Department of Economics.
    18. Janet L. Reyna & Mikhail V. Chester, 2017. "Energy efficiency to reduce residential electricity and natural gas use under climate change," Nature Communications, Nature, vol. 8(1), pages 1-12, August.
    19. Pesaran, M. Hashem & Vanessa Smith, L. & Yamagata, Takashi, 2013. "Panel unit root tests in the presence of a multifactor error structure," Journal of Econometrics, Elsevier, vol. 175(2), pages 94-115.
    20. Adedoyin, Festus Fatai & Alola, Andrew Adewale & Bekun, Festus Victor, 2021. "The alternative energy utilization and common regional trade outlook in EU-27: Evidence from common correlated effects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    21. Eberhardt, Markus & Teal, Francis, 2008. "Modeling technology and technological change in manufacturing: how do countries differ?," MPRA Paper 10690, University Library of Munich, Germany.
    22. Kenneth Gillingham & David Rapson & Gernot Wagner, 2016. "The Rebound Effect and Energy Efficiency Policy," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(1), pages 68-88.
    23. Khan, Samiha & Murshed, Muntasir & Ozturk, Ilhan & Khudoykulov, Khurshid, 2022. "The roles of energy efficiency improvement, renewable electricity production, and financial inclusion in stimulating environmental sustainability in the Next Eleven countries," Renewable Energy, Elsevier, vol. 193(C), pages 1164-1176.
    24. Omri, Anis, 2013. "CO2 emissions, energy consumption and economic growth nexus in MENA countries: Evidence from simultaneous equations models," Energy Economics, Elsevier, vol. 40(C), pages 657-664.
    25. Costa-Campi, María Teresa & García-Quevedo, José & Segarra, Agustí, 2015. "Energy efficiency determinants: An empirical analysis of Spanish innovative firms," Energy Policy, Elsevier, vol. 83(C), pages 229-239.
    26. Muhammad, Sulaman & Long, Xingle & Salman, Muhammad & Dauda, Lamini, 2020. "Effect of urbanization and international trade on CO2 emissions across 65 belt and road initiative countries," Energy, Elsevier, vol. 196(C).
    27. Loan Thi-Hong Van & Anh The Vo & Nhan Thien Nguyen & Duc Hong Vo, 2021. "Financial Inclusion and Economic GROWTH: An International Evidence," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 57(1), pages 239-263, January.
    28. Sinha, Avik & Shahbaz, Muhammad & Sengupta, Tuhin, 2018. "Renewable Energy Policies and Contradictions in Causality: A case of Next 11 Countries," MPRA Paper 87542, University Library of Munich, Germany, revised 17 Jun 2018.
    29. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    30. Parker, Steven & Bhatti, M. Ishaq, 2020. "Dynamics and drivers of per capita CO2 emissions in Asia," Energy Economics, Elsevier, vol. 89(C).
    31. Nitin Koshta & Hajam Abid Bashir & Taab Ahmad Samad, 2020. "Foreign trade, financial development, agriculture, energy consumption and CO2emission: testing EKC among emerging economies," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 14(1), pages 50-80, August.
    32. Dong, Kangyin & Hochman, Gal & Timilsina, Govinda R., 2020. "Do drivers of CO2 emission growth alter overtime and by the stage of economic development?," Energy Policy, Elsevier, vol. 140(C).
    33. Danish & Recep Ulucak & Salah‐Ud‐Din Khan, 2020. "Relationship between energy intensity and CO2 emissions: Does economic policy matter?," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(5), pages 1457-1464, September.
    34. Lingui Qin & Syed Raheem & Muntasir Murshed & Xu Miao & Zeeshan Khan & Dervis Kirikkaleli, 2021. "Does financial inclusion limit carbon dioxide emissions? Analyzing the role of globalization and renewable electricity output," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(6), pages 1138-1154, November.
    35. Viktoriia Koilo, 2019. "Evidence of the Environmental Kuznets Curve: Unleashing the Opportunity of Industry 4.0 in Emerging Economies," JRFM, MDPI, vol. 12(3), pages 1-18, July.
    36. Feng Zhao & Yinyin Zhang & Majed Alharthi & Muhammad Wasif Zafar, 2022. "Environmental sustainability in developing countries: Understanding the criticality of financial inclusion and globalization," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(6), pages 1823-1837, December.
    37. Polzin, Friedemann & Egli, Florian & Steffen, Bjarne & Schmidt, Tobias S., 2019. "How do policies mobilize private finance for renewable energy?—A systematic review with an investor perspective," Applied Energy, Elsevier, vol. 236(C), pages 1249-1268.
    38. Sinha, Avik & Shahbaz, Muhammad, 2018. "Estimation of Environmental Kuznets Curve for CO2 emission: Role of renewable energy generation in India," Renewable Energy, Elsevier, vol. 119(C), pages 703-711.
    39. Mehmet Akif Destek & Esra Balli & Muge Manga, 2016. "The Relationship between CO2 Emission, Energy Consumption, Urbanization and Trade Openness for Selected CEECs," Research in World Economy, Research in World Economy, Sciedu Press, vol. 7(1), pages 52-58, June.
    40. Le, Thai-Ha & Le, Ha-Chi & Taghizadeh-Hesary, Farhad, 2020. "Does financial inclusion impact CO2 emissions? Evidence from Asia," Finance Research Letters, Elsevier, vol. 34(C).
    41. Atif Jahanger & Muhammad Usman & Daniel Balsalobre‐Lorente, 2022. "Linking institutional quality to environmental sustainability," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(6), pages 1749-1765, December.
    42. Sharif, Arshian & Raza, Syed Ali & Ozturk, Ilhan & Afshan, Sahar, 2019. "The dynamic relationship of renewable and nonrenewable energy consumption with carbon emission: A global study with the application of heterogeneous panel estimations," Renewable Energy, Elsevier, vol. 133(C), pages 685-691.
    43. Sadorsky, Perry, 2014. "The effect of urbanization on CO2 emissions in emerging economies," Energy Economics, Elsevier, vol. 41(C), pages 147-153.
    44. Trotta, Gianluca, 2020. "Assessing energy efficiency improvements and related energy security and climate benefits in Finland: An ex post multi-sectoral decomposition analysis," Energy Economics, Elsevier, vol. 86(C).
    45. Stephen Taiwo Onifade & Festus Victor Bekun & Agboola Phillips & Mehmet Altuntaş, 2022. "How do technological innovation and renewables shape environmental quality advancement in emerging economies: An exploration of the E7 bloc?," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(6), pages 2002-2014, December.
    46. Özbuğday, Fatih Cemil & Erbas, Bahar Celikkol, 2015. "How effective are energy efficiency and renewable energy in curbing CO2 emissions in the long run? A heterogeneous panel data analysis," Energy, Elsevier, vol. 82(C), pages 734-745.
    47. Buhari DOĞAN & Osman DEĞER, 2018. "The role of economic growth and energy consumption on CO2 emissions in E7 countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(615), S), pages 231-246, Summer.
    48. Kim, Jeayoon & Park, Kwangwoo, 2016. "Financial development and deployment of renewable energy technologies," Energy Economics, Elsevier, vol. 59(C), pages 238-250.
    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. Khan, Samiha & Murshed, Muntasir & Ozturk, Ilhan & Khudoykulov, Khurshid, 2022. "The roles of energy efficiency improvement, renewable electricity production, and financial inclusion in stimulating environmental sustainability in the Next Eleven countries," Renewable Energy, Elsevier, vol. 193(C), pages 1164-1176.
    2. Shahbaz, Muhammad & Nwani, Chinazaekpere & Bekun, Festus Victor & Gyamfi, Bright Akwasi & Agozie, Divine Q., 2022. "Discerning the role of renewable energy and energy efficiency in finding the path to cleaner consumption and production patterns: New insights from developing economies," Energy, Elsevier, vol. 260(C).
    3. Chien, Fengsheng & Anwar, Ahsan & Hsu, Ching-Chi & Sharif, Arshian & Razzaq, Asif & Sinha, Avik, 2021. "The role of information and communication technology in encountering environmental degradation: Proposing an SDG framework for the BRICS countries," Technology in Society, Elsevier, vol. 65(C).
    4. Alvarado, Rafael & Tillaguango, Brayan & Murshed, Muntasir & Ochoa-Moreno, Santiago & Rehman, Abdul & Işık, Cem & Alvarado-Espejo, Johana, 2022. "Impact of the informal economy on the ecological footprint: The role of urban concentration and globalization," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 750-767.
    5. Lian Xue & Mohammad Haseeb & Haider Mahmood & Tarek Tawfik Yousef Alkhateeb & Muntasir Murshed, 2021. "Renewable Energy Use and Ecological Footprints Mitigation: Evidence from Selected South Asian Economies," Sustainability, MDPI, vol. 13(4), pages 1-20, February.
    6. Anu, & Singh, Amit Kumar & Raza, Syed Ali & Nakonieczny, Joanna & Shahzad, Umer, 2023. "Role of financial inclusion, green innovation, and energy efficiency for environmental performance? Evidence from developed and emerging economies in the lens of sustainable development," Structural Change and Economic Dynamics, Elsevier, vol. 64(C), pages 213-224.
    7. Liton Chandra Voumik & Mohammad Iqbal Hossain & Md. Hasanur Rahman & Raziya Sultana & Rahi Dey & Miguel Angel Esquivias, 2023. "Impact of Renewable and Non-Renewable Energy on EKC in SAARC Countries: Augmented Mean Group Approach," Energies, MDPI, vol. 16(6), pages 1-19, March.
    8. Zafar, Muhammad Wasif & Shahbaz, Muhammad & Sinha, Avik & Sengupta, Tuhin & Qin, Quande, 2020. "How Renewable Energy Consumption Contribute to Environmental Quality? The Role of Education in OECD Countries," MPRA Paper 100259, University Library of Munich, Germany, revised 08 May 2020.
    9. Churchill, Sefa Awaworyi & Inekwe, John & Ivanovski, Kris & Smyth, Russell, 2018. "The Environmental Kuznets Curve in the OECD: 1870–2014," Energy Economics, Elsevier, vol. 75(C), pages 389-399.
    10. Belaïd, Fateh & Zrelli, Maha Harbaoui, 2019. "Renewable and non-renewable electricity consumption, environmental degradation and economic development: Evidence from Mediterranean countries," Energy Policy, Elsevier, vol. 133(C).
    11. Dobdinga Cletus Fonchamnyo & Ongo Nkoa Bruno Emmanuel & Gildas Dohba Dinga, 2021. "The effects of trade, foreign direct investment, and economic growth on environmental quality and overshoot: a dynamic common correlation effects approach," SN Business & Economics, Springer, vol. 1(10), pages 1-27, October.
    12. Hussein Moghaddam & Robert M. Kunst, 2023. "The Role of Natural Gas in Mitigating Greenhouse Gas Emissions: The Environmental Kuznets Curve Hypothesis for Major Gas-Producing Countries," Sustainability, MDPI, vol. 15(5), pages 1-20, February.
    13. Usman, Muhammad & Makhdum, Muhammad Sohail Amjad, 2021. "What abates ecological footprint in BRICS-T region? Exploring the influence of renewable energy, non-renewable energy, agriculture, forest area and financial development," Renewable Energy, Elsevier, vol. 179(C), pages 12-28.
    14. Chishti, Muhammad Zubair & Sinha, Avik, 2022. "Do the shocks in technological and financial innovation influence the environmental quality? Evidence from BRICS economies," Technology in Society, Elsevier, vol. 68(C).
    15. Li, Xuelin & Yang, Lin, 2023. "Natural resources, remittances and carbon emissions: A Dutch Disease perspective with remittances for South Asia," Resources Policy, Elsevier, vol. 85(PB).
    16. Irfan Khan & Fujun Hou, 2021. "The Impact of Socio-economic and Environmental Sustainability on CO2 Emissions: A Novel Framework for Thirty IEA Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 155(3), pages 1045-1076, June.
    17. Saptorshee Kanto Chakraborty & Massimiliano Mazzanti, 2021. "Revisiting the literature on the dynamic Environmental Kuznets Curves using a latent structure approach," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(3), pages 923-941, October.
    18. Yu-Ke, Chen & Hassan, Muhammad Shahid & Kalim, Rukhsana & Mahmood, Haider & Arshed, Noman & Salman, Muhammad, 2022. "Testing asymmetric influence of clean and unclean energy for targeting environmental quality in environmentally poor economies," Renewable Energy, Elsevier, vol. 197(C), pages 765-775.
    19. Badeeb, Ramez Abubakr & Wang, Bo & Zhao, Jun & Khan, Zeeshan & Uktamov, Khusniddin Fakhriddinovich & Zhang, Changyong, 2023. "Natural resources extraction and financial inclusion: Linear and non-linear effect of natural resources on financial sector," Resources Policy, Elsevier, vol. 85(PA).
    20. Shuddhasattwa Rafiq & Ingrid Nielsen & Russell Smyth, 2016. "Effect of Internal Migration on Air and Water Pollution in China," Monash Economics Working Papers 27-16, Monash University, Department of Economics.

    More about this item

    Statistics

    Access and download statistics

    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:wly:sustdv:v:31:y:2023:i:1:p:307-320. 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: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-1719 .

    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.