Assessing the drivers, policies and measures that affect greenhouse gas emissions: an econometric analysis
thesisposted on 28.03.2022, 13:37 authored by Samuel Asumadu-Sarkodie
As a contribution to the global debate on mitigating climate change and its impacts, this thesis examined the drivers of greenhouse gas emissions using an econometric approach.The investigation of the nexus between environmental pollution economic growth in Africa confirms the validity of the EKC hypothesis in Africa at a turning point of US$ 5,702 GDP per capita. However, the nexus between environmental degradation and economic growth reveals a U shape at a lower bound GDP of US$ 101/capita and upperbound GDP of US$ 8,050/capita, at a turning point of US$ 7,958 GDP per capita, confirming the scale effect hypothesis. The empirical findings revealed that energy consumption, food production, economic growth, permanent crop, agricultural land,environmental pollution, birth rate, and fertility rate play a major role in environmental degradation and pollution in Africa, thus, supporting the global indicators for achieving the Sustainable Development Goals by 2030. In accordance with the Sustainable Development Goal 17 of improving global partnership for sustainable development, we examined the effect of foreign direct investment inflows, economic development, and energy consumption on greenhouse gas emissions from 1982-2016 for the top five emitters of greenhouse gas emissions from fuel combustion in the developing countries, namely; China, India, Iran, Indonesia and South Africa. The study employed a panel data regression with Driscoll-Kraay standard errors, U test estimation approach and panel quantile regression with non-additive fixed-effects. The study found a strong positive effect of energy consumption on greenhouse gas emissions and confirmed the validity of the pollution haven hypothesis. The environmental Kuznets curve hypothesis is valid for China and Indonesia at a turning point of US$ 6,014 and US$ 2,999; second, a U-shape relationship is valid for India and South Africa at a turning point of US$ 1,476 and US$ 7,573. Foreign direct investment inflows with clean technological transfer and improvement in labor and environmental management practices will help developing countries to achieve the sustainable development goals. Mitigation of greenhouse gas emissions depends on enhanced energy efficiency, adoption of clean and modern energy technologies, such as renewable energy, nuclear, and the utilization of carbon capture and storage for fossil fuel and biomass energy generation processes. To examine the factors contributing to adverse greenhouse gas emission and economic impacts relative to their development, we examined the EKC and Environmental Sustainability curve hypotheses for Australia, China, Ghana and the USA from 1971-2013. The study revealed that a decline of carbon dioxide emissions in developed countries can be attributed to a paradigm shift and structural change from high-energy intensive and carbon-intensive industries to services and information-intensive industries. The increasing levels of carbon dioxide emissions in developing and least developing countries can be attributed to the economy driven agriculture, transport, and services. Environmental policies and regulations in developing and least developing countries are weaker compared to developed countries, as such, they become a haven for high-energy and carbon-intensive industries. The high awareness of environmental sustainability, technological advancement, stringent environmental regulations and policies in developed countries result in a decline in energy intensity and a decline in carbon dioxide emissions. The Environmental Sustainability Curve hypothesis shows that the affecting factors include economic growth, energy consumption patterns and carbon dioxide emissions. The study reveals electric power consumption as the main contributor of energy intensity in the selected countries. Decoupling economic growth from electric power consumption and improving energy efficiency in China, Ghana, Australia, and the USA will enhance energy security and decline the economic related dynamics and activities on the environment.