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Testing the globalization-driven carbon emissions hypothesis: International evidence

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  • Muhammad Shahbaz
  • Mantu Kumar Mahalik
  • Syed Jawad Hussain Shahzad
  • Shawkat Hammoudeh

Abstract

We empirically investigate the dynamic relationship between globalization and CO2emissions for 87 (high, middle and low-income) countries. We utilize the cross-correlation approach to examine the well-known EKC hypothesis between globalization and environmental degradation. The results validate the inverted U-shaped EKC hypothesis for 16 (approximately 18%) from the high- and middle-income countries only, thereby highlighting that a rise in globalization will decrease carbon emissions for these countries in the future. On contrary, the results also confirm the U-shaped relationship between globalization and environmental degradation for 8% of the countries. The remaining countries do not have a U- or an inverted U-shaped relationship between globalization and CO2 emissions. Policy implications are also discussed.

Suggested Citation

  • Muhammad Shahbaz & Mantu Kumar Mahalik & Syed Jawad Hussain Shahzad & Shawkat Hammoudeh, 2019. "Testing the globalization-driven carbon emissions hypothesis: International evidence," International Economics, CEPII research center, issue 158, pages 25-38.
    • Handle: RePEc:cii:cepiie:2019-q2-158-3
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    More about this item

    Keywords

    Globalization; Carbon emissions; Cross-correlation; EKC;
    All these keywords.

    JEL classification:

    • F6 - International Economics - - Economic Impacts of Globalization
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General

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