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CO2 emissions, energy consumption and economic growth: Evidence from the Trans-Pacific Partnership

Author

Listed:
  • Duc Hong Vo

    (Business and Economics Research Group Ho Chi Minh City Open University, Vietnam.)

  • Ha Minh Nguyen

    (Ho Chi Minh City Open University, Vietnam.)

  • Anh The Vo

    (Business and Economics Research Group Ho Chi Minh City Open University, Vietnam.)

  • Michael McAleer

    ( Department of Quantitative Finance National Tsing Hua University, Taiwan and Econometric Institute Erasmus School of Economics Erasmus University Rotterdam, The Netherlands and Department of Quantitative Economics Complutense University of Madrid, Spain And Institute of Advanced Sciences Yokohama National University, Japan.)

Abstract

The paper investigates the role of consumption of both renewable and sustainable energy, as well as alternative and nuclear energy, in mitigating the effects of carbon dioxide (CO2) emissions, based on the Environmental Kuznets Curve (EKC). The papers introduces a novel variable to capture trade openness, which appears to be a crucial factor in inter-regional co-operation and development, in order to evaluate its effect on the environment, The empirical analysis is based on a sample of nine signatories to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) for the period 1971-2014, which is based on data availability. The empirical analysis is based on several time series econometric methods, such as the cointegration test, two long run estimators, namely the fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) methods, as well as the Granger causality test. There are several noteworthy empirical findings: it is possible to confirm the U-shaped EKC hypothesis for six countries, namely Australia, Canada, Chile, New Zealand, Peru and Vietnam; there is no evidence of the EKC for Mexico; a reverse-shaped EKC is observed for Japan and Malaysia, there are long run relationships among the variables, the adoption of either renewable energy, or alternative energy and nuclear energy, mitigates CO2 emissions, trade openness leads to more beneficial than harmful impacts in the long run, the Granger causality tests show more bi-directional-relationships between the variables in the long run, and the Granger causality tests show more uni-directional-relationships between the variables in the short run.

Suggested Citation

  • Duc Hong Vo & Ha Minh Nguyen & Anh The Vo & Michael McAleer, 2019. "CO2 emissions, energy consumption and economic growth: Evidence from the Trans-Pacific Partnership," Documentos de Trabajo del ICAE 2019-08, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
  • Handle: RePEc:ucm:doicae:1908
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    More about this item

    Keywords

    Renewable and sustainable energy; Alternative energy; Nuclear energy; Carbon emissions; CPTPP; EKC hypothesis; DOLS; FMOLS; Granger causality; VECM.;

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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