Assessing the Impact of Factors Driving Global Carbon Dioxide Emissions
Redwan Ahmed
School of Science and the Environment, Environmental Policy Institute, Memorial University, Grenfell Campus, Corner Brook, Newfoundland and Labrador, A2H 5G4, Canada and Department of Economics, Pabna University of Science and Technology, Bangladesh.
Gabriela Sabau
School of Science and the Environment, Department of Environment and Sustainability, Memorial University, Grenfell Campus, 20 University Drive, Corner Brook, Newfoundland and Labrador, A2H 5G4, Canada.
Morteza Haghiri *
School of Science and the Environment, Department of Environment and Sustainability, Memorial University, Grenfell Campus, 20 University Drive, Corner Brook, Newfoundland and Labrador, A2H 5G4, Canada.
*Author to whom correspondence should be addressed.
Abstract
The aim of this study is to empirically investigate the causal relationship between global CO2 emissions and six of their potentially contributing factors (i.e., economic growth, energy consumption, population, trade openness, financial development and corruption), by using a panel data collected from 65 countries during 1995 to 2013. We developed a dynamic model and used a four-step testing procedures (i.e., panel unit root tests, panel cointegration tests, long-run estimates, i.e. FMOLS estimates and a Granger causality test). The results showed that the most important factors driving global CO2 emissions were economic growth, energy consumption, corruption and financial development. It is recommended that countries develop their own CO2 reducing policies by designing an appropriate combination/mix of policy tools, such as regulation, economic, voluntary and educational/ informational instruments to address their environmental pollution. Countries could consider all dimensions of well-being when they measure their economic development. Imposing pollution taxes on fossil fuel based energy supplies, developing emissions standards, strengthening anti-corruption strategies and educating people about the adverse effects of CO2 emissions on the natural environment and human health are potential policy measures.
Keywords: CO2 emissions, trade openness, financial development, emissions standards, anti-corruption strategies.