The Link between Human Development, Foreign Direct Investment, Renewable Energy, and Carbon Dioxide Emissions in G7 Economies

This research evaluates the determinants of pollution emissions, considering the human development index, international trade, renewable energy, and foreign direct investment (FDI) as explanatory variables. This study tests the relationship between trade intensity and FDI on carbon dioxide emissions...

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Bibliographic Details
Published in:Energies (Basel) 2024-03, Vol.17 (5), p.978
Main Author: Leitão, Nuno Carlos
Format: Article
Language:English
Subjects:
Air quality
Air quality management
Alternative energy sources
Analysis
Carbon dioxide
CO2 emissions
cointegration
Econometric models
Economic aspects
Economic growth
Energy consumption
Energy industry
Environmental Kuznets curve
Foreign investment
Foreign investments
Global temperature changes
International trade
panel data
Pollution
Roles
unit root test
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Summary:This research evaluates the determinants of pollution emissions, considering the human development index, international trade, renewable energy, and foreign direct investment (FDI) as explanatory variables. This study tests the relationship between trade intensity and FDI on carbon dioxide emissions, considering the arguments of the pollution haven hypothesis (PHH) versus halo pollution (HP). The econometric strategy applies panel data (fixed effects, random effects), a generalised linear model (Gamma), panel cointegration models such as FMOLS and DOLS, the ARDL panel model, and the panel quantile regressions to data from the G7 countries from 1990 to 2019. Before using econometric models, this investigation considers preliminary tests such as the panel unit root test (first and second generation) and the cointegration test. The econometric results show that human development decreased pollution emissions. In addition, renewable energy improves air quality and aims to reduce climate change. The inverted environmental Kuznets curve also supports the results when evaluating the relationship between the human development index and carbon dioxide emissions.
ISSN:1996-1073
1996-1073
DOI:10.3390/en17050978