What initiates carbon dioxide emissions along the Belt and Road Initiative? An insight from a dynamic heterogeneous panel data analysis based on incarnated carbon panel

• Published in: Environmental science and pollution research international Vol. 28; no. 45; pp. 64516 - 64535
• Main Authors: Abban, Olivier Joseph, Hongxing, Yao
• Format: Journal Article
• Language: English
• Published: Berlin/Heidelberg Springer Berlin Heidelberg 01-12-2021; Springer Nature B.V
• Subjects: Aquatic Pollution; Atmospheric Protection/Air Quality Control/Air Pollution; Carbon dioxide; Carbon dioxide emissions; Climate action; Climate change; Coal gas; Cooperation; Data analysis; Earth and Environmental Science; Econometrics; Economic development; Economic growth; Economics; Ecotoxicology; Emissions; Energy consumption; Energy policy; Energy transition; Environment; Environmental changes; Environmental Chemistry; Environmental Health; Environmental science; Exports; Fossil fuels; Government aid; Heterogeneity; Job creation; Longitudinal studies; Panels; Research Article; Roads; Sustainable development; Waste Water Technology; Water Management; Water Pollution Control; Urbanization; Slope heterogeneity; CO; Economic growth; emissions; Fossil fuel consumption
• ISSN: 0944-1344; 1614-7499
• DOI: 10.1007/s11356-021-14779-5

The Belt and Road Initiative (BRI), as an economic cooperation, provides interaction between the relevant countries and China. This cooperation between the BRI economies is basically aimed at increasing economic development. However, economic cooperation affects humanity in many ways, such as job creation, economic growth, environmental changes, and changes in the consumption of energy. Among these changes, considerable attention has been drawn to CO
2
emissions arising from economic growth and its related environmental changes. This attention is vital in order to achieve the UN sustainable development goal 13: urgent action to combat climate change and regulations for the emissions of CO
2
. Thus, this study explores the determinants of CO
2
emissions along the BRI, taking into consideration if countries are net importers or exporters of incarnated carbon dioxide. The econometrics applied indicated the presence of slope heterogeneity and cross-sectional dependencies across the various panels. Applying the Westerlund bootstrap co-integration unveiled the presence of a long-run equilibrium association among the variables. The results from the dynamic common correlated estimator (DCCE) revealed that the contribution weight (order of importance) to CO
2
emissions varies across panel clusters. The causality results unveiled a bidirectional causation in all panels between economic growth and CO
2
emissions. Trade openness and CO
2
emissions have a bidirectional effect in the belt and road and net exporters of incarnated carbon dioxide panels. Based on the results obtained, the policy implications suggested that (a) energy transition from fossil fuel usage to renewables will play a crucial role in mitigating economic growth’s environmental pressures and (b) governments along the BRI could also implement subsidy swaps involving the transfer of government aid from oil and coal gas to renewable sources, including wind and solar.