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The effect of import product diversification on carbon emissions: New evidence for sustainable economic policies

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  • Hu, Guoheng
  • Can, Muhlis
  • Paramati, Sudharshan Reddy
  • Doğan, Buhari
  • Fang, Jianchun

Abstract

This study examines the effect of import product diversification and renewable energy consumption on CO2 emissions across a panel of 35 developed and 93 developing economies. The empirical models utilize an environmental theoretical framework and yearly data for 1995–2014. The study makes use of common correlated effects—specifically mean group (CCE-MG) and augmented mean group (AMG) estimators. The overall results suggest that import product diversification has a substantial negative and positive impact on the carbon emissions of developed and developing economies, respectively. This study also finds that increasing renewable energy consumption helps to meet climate change targets by reducing carbon emissions. Thus, import product diversification and renewable energy could play an indispensable role in reducing carbon emissions in developed economies; while renewable energy is the only factor that assists developing economies meet their emission reduction targets at this stage.

Suggested Citation

  • Hu, Guoheng & Can, Muhlis & Paramati, Sudharshan Reddy & Doğan, Buhari & Fang, Jianchun, 2020. "The effect of import product diversification on carbon emissions: New evidence for sustainable economic policies," Economic Analysis and Policy, Elsevier, vol. 65(C), pages 198-210.
    • Handle: RePEc:eee:ecanpo:v:65:y:2020:i:c:p:198-210
    DOI: 10.1016/j.eap.2020.01.004
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    More about this item

    Keywords

    Import product diversification; Renewable energy; Carbon emissions; AMG estimator;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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