Does Trade Openness Promote Carbon Emissions? Empirical Evidence from Sri Lanka (original) (raw)
Related papers
Does a Long-Run Relationship Exist between Trade Openness and Carbon Dioxide Emissions in Sri Lanka?
Asian Development Policy Review
In recent years, the process of globalization has provided a great deal of support to international trade, which has led to the increase in global trade volume. However, as far as the negative characteristics of international trade flows are concerned, the extensive production and trade needed to meet global demands have led to higher energy consumption and higher carbon dioxide (CO¬2) emissions. Sri Lanka has been trading since 1977, so the objective of this study is to investigate the existence of the relationship between trade and carbon dioxide emissions in Sri Lanka. Using annual time series data running from 1980 to 2014, this study employs Johansen’s cointegration method for econometric analysis. The findings of the study derived from the analysis revealed that the intended variables are likely to move together in the long run. The study suggests that reprocessing emissions, pollution prevention actions, and the introduction of low carbon technology in trade can mitigate carb...
Journal of Economics, Finance and Administrative Science, 2021
Purpose-The purpose of this study is to examine the impact of economic growth, trade openness and manufacturing on CO2 emissions in India. Design/methodology/approach-The study employed autoregressive distributive lag (ARDL) bounds test approach and uses CO2 emissions, trade, manufacturing and GDP per capita to examine the relationship using an annual time series data from World Development Indicators during 1971 to 2016. Findings-Results depict that there exists a long-run relationship between CO2 emissions and other variables. Trade openness significantly reduces CO2 emissions, whereas manufacturing and GDP have a significant and positive impact on CO2 in the long run. Research limitations/implications-The findings of the study contribute to the body of knowledge by providing new evidence on the relationship between developmental metrics and the environment. These findings are critical for policymakers and regulatory bodies to focus on economic development without jeopardizing environmental degradation. Practical implications-In order to keep its commitment to sustainability, India needs to develop policies that encourage cleaner production methods and establishment of non-polluting industries. Simultaneously, it must disincentivize industries that emit CO2 by policy frameworks such as carbon taxes, pollution taxes or green taxes. Originality/value-None of studies examine at how these environmental factors interact in India. Kilavuz and Dogan (2020) used the same variables, but their scope was limited to Turkey. As a result, the study is the first to examine this relationship for India, contributing to the body of knowledge on economic growth, manufacturing, trade openness and environmental concerns.
Trade Openness and CO2 Emissions: Evidence of Bangladesh
Asian Journal of Atmospheric Environment
This paper examines the long run cointegrating relation and short run dynamics among carbon emissions, energy consumption, economic growth, urbanization, financial development and openness to trade in Bangladesh by using autoregressive distributed lag (ARDL) bounds testing approach of cointegration. Empirical results for Bangladesh over the period 1975-2010 suggest an evidence of a long-run relationship between the variables at 1% significance level in Bangladesh. The estimated coefficient of energy consumption and urbanization are positive and highly significant indicating that increasing level of urbanization and energy consumption are responsible for CO2 emission in Bangladesh. However, it is also found that an increase in the real GDP per capita tend to reduce carbon emissions per capita. On the other hand, there is no evidence of a causal relationship between carbon emission and financial development and trade openness.
This chapter analyzes the impact of trade openness on environmental pollution in the newly industrialized countries that have focused on trade over the period 1971-2010 by using recently developed panel unit root, cointegration, and causality tests. The results indicate a cointegration relationship between the variables. The results also show that trade openness increases carbon dioxide emissions with the elasticity of 0.53 and there is a Granger causality running from trade openness to carbon dioxide emissions in the long run. These findings may provide some policy implications. Without taking into account impact of trade on pollutions, optimistic environmental Kuznets curve hypothesis would be invalid. Therefore, policymakers who decide on environment policies should pay attention to not only growth effects but also trade effects on pollutions. Future empirical analysis would expose the new evidences for governmental policies and environmental regulations to change these effects positively.
THE NEXUS BETWEEN TRADE OPENNESS AND CO2 EMISSIONS IN SELECTED BIMP-EAGA COUNTRIES
This study is to examine the relationship between trade openness and CO 2 emission in selected BIMP-EAGA countries for the period 1970-2008 using annual time series data. Augmented Dickey Fuller test, Johansen and Juselius test and Vector Error Correction Model have been employed to conduct the analysis. According to the empirical analysis, the longrun relationship is found between trade openness and environmental quality in Malaysia. The findings also indicate that there is a short-run uni-directional relationship in the Philippines. As a result, to lessen the environmental harm, countries become more open in trade in order to gain better transfer of new clean technology, knowledge and skills to improve their industrialization processes and achieve long-term environmental sustainability.
The Long-Run Effects of Trade Openness on Carbon Emissions in Sub-Saharan African Countries
Energies, 2020
Using a panel cointegration model developed based on the data extracted from the World Bank indicators, this study quantified the relationship between carbon emissions, energy consumption, economic growth, and trade openness in sub-Saharan African countries. It discovered from our analysis that there exists a long-run causality association amongst CO2 emissions, energy consumption, economic growth, and trade openness. The study noted the existence of the Environmental Kuznets Curve (EKC) in the panel using the square term for trade openness; it was found to have a negative impact, thus trade in the long run will somewhat decrease the environmental pollution in this region. The study results imply that there should be stringent policies and rigorous enforcement in sub-Saharan African to ensure sustainable growth without associative environmental issues.
The Impact of Trade Openness on Environmental Pollution
Regional Economic Integration and the Global Financial System, 2015
This chapter analyzes the impact of trade openness on environmental pollution in the newly industrialized countries that have focused on trade over the period 1971-2010 by using recently developed panel unit root, cointegration, and causality tests. The results indicate a cointegration relationship between the variables. The results also show that trade openness increases carbon dioxide emissions with the elasticity of 0.53 and there is a Granger causality running from trade openness to carbon dioxide emissions in the long run. These findings may provide some policy implications. Without taking into account impact of trade on pollutions, optimistic environmental Kuznets curve hypothesis would be invalid. Therefore, policymakers who decide on environment policies should pay attention to not only growth effects but also trade effects on pollutions. Future empirical analysis would expose the new evidences for governmental policies and environmental regulations to change these effects p...
Energy Economics, 2017
This paper explores the relationship between trade openness and CO 2 emissions by incorporating economic growth as an additional and potential determinant of this relationship for three groups of 105 high, middle and low income countries. We apply the Pedroni (1999) and Westerlund (2007) panel cointegration tests and find that the three variables are cointegrated in the long run. Trade openness impedes environmental quality for the global, high income, middle and low income panels but the impact varies in these diverse groups of countries. The panel VECM causality results highlights a feedback effect between trade openness and carbon emissions at the global level and the middle income countries but trade openness Granger causes CO 2 emissions for the high income and low income countries. Policy implications are also provided.
Assessing the effects of trade openness on sustainable development: evidence from India
springer, 2020
Over the years, world market is integrating at much faster pace through increasing trade openness. Not being an unmixed blessing, consistent efforts have been made to examine impact of trade openness on economic, environmental and social welfare. This study is an attempt to empirically examine the implications of trade openness on sustainable development in India since liberalization policy 1991. We used the Autoregressive Distributed Lag (ARDL) model to test the relationship between sustainable development and trade openness along with other control variables that are supposed to affect sustainable development. The results established supports the opinion of environmentalists. The empirical results are contrary to the conventionally held belief, indicating that trade shares a negative correlation with green GDP growth and positive correlation with gap between conventional GDP and green GDP. These findings support the arguments that trade openness tend to be both distorting and detrimental to the future generations.