An Interrelationship Study Among CO₂ Emissions,Economic Growth And Energy Consumption

As an economic cooperation,the Belt and Road initiative provides interaction between organizations,businesses and governments.The interaction among the countries along the Belt and Road is essentially aimed at increasing economic growth.Towards such ripple effect,the economic cooperation affects human life in many ways,including the overexploitation of natural resources,changes in consumption of energy,economic development,jobs creation,and environmental changes.Among these changes,the emissions of carbon dioxide resulting from economic development and the associated environmental changes have gained significant attention.Achieving sustainable development goals,“Taking urgent action to combat climate change and its impacts by regulating emissions”(goal 13),is critical.The present spans in the spectrum of contributing to the sustainable development goals,thus analyse the impact of economic development and energy consumption on carbon dioxide emissions along the Belt and Road initiative.In determining the impact of economic development on carbon dioxide emissions,the study clustered the Belt and Road countries into income classification.This will determine the role played by income classification in carbon dioxide emissions.Additionally,to determine which energy type mitigate carbon dioxide emissions best while increasing economic growth,the Belt and Road countries were grouped into energy exporters and energy importers.In this paper,the panel data model is constructed and analyzed by using Panel Unit Root test,Panel Cointegration test and Panel Causality test based on panel data model.And this study employed panel data regression model with the Augmented Mean Group and Pooled Mean Group as estimators since they are robust to cross sectional dependency,heterogeneity and produce efficient results.The empirical results indicates that(1)the data from all income group had cross sectional association;(2)the variables are integrated of order 1 after first difference;(3)The variables under discussion were cointegrated;(4)at 1% increase in energy intensity,carbon dioxide emissions increased by 0.8606%,0.9082%,0.91815%,and 0.8043% in High,Upper middle,Lower middle and Low income countries respectively.Whereas a 1% increase in foreign direct investment High income countries reduces carbon emissions by 0.0581% as Low income countries increase carbon dioxide emission by 1.8287%.Upper and Lower middle income countries have no statistically significant impact by the increase of foreign direct investment.(5)A bidirectional causal relationship was found between foreign direct investment and carbon dioxide across all income groups.Energy intensity has a unidirectional association with carbon dioxide in Low,Upper middle and High income countries but no causal association was felt in Lower middle income countries.While the existence of the environmental Kuznets Curve hypothesis was revealed only in High income countries.The results further indicated that;for energy importers,carbon dioxide emission has a significant positive correlation with fossil fuel and nuclear energy,while renewable energy has a significant negative correlation with carbon dioxide emissions.For energy exporting countries,a significant positive two-way relationship amidst fossil fuel and carbon dioxide emissions,and a significant negative one-way causal relationship from nuclear energy and renewable energy unto carbon dioxide emission.These recent methodologies and findings show that,the causal affiliations together with long and short run estimated effects amid employed variables are influenced by the different income levels of Belt and Road countries in a tender to reduce emissions likewise in energy groupings along Belt and Road countries in a tender to mitigate carbon dioxide emissions.The results of this study are likely to be of interest to governments,policy makers,academics and researchers.It is anticipated that the study contributes by providing useful insights into economic cooperation and energy consumption along the Belt and Road Initiative in order to take urgent action in regulating carbon emissions and combat climate change.