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The Impact of Financial Development on Decarbonization Factors of Carbon Emissions: A Global Perspective

Author

Listed:
  • N. Thangaiyarkarasi

    (Department of Commerce and Financial Studies, Bharathidasan University, Trichy, India.)

  • S. Vanitha

    (Department of Commerce and Financial Studies, Bharathidasan University, Trichy, India.)

Abstract

In order to limit the adverse effects of climate change, the carbon dioxide emissions should be controlled. These toxic emissions are associated with the energy sector like coal, oil, natural gas, which produce air pollution and it has to be reduced. Reductions can be brought about by using appropriate technologies and policy initiatives. Financial development has been an important factor, which influences the decision on carbon emissions. This study attempts to study the relationship between financial development and carbon emissions, based on the least square of NLS and ARMA method and the data, based on 10 developed countries and five developing countries, during the study period of 10 years from 1st April 2010 to 31st March 2019. The study employed the Kaya identity IPAT model, unit root test and co-integration test. The variables of GDP per capita and carbon dioxide (CO2) emissions were used as a measure of economic financial development and the status of environmental degradation.

Suggested Citation

  • N. Thangaiyarkarasi & S. Vanitha, 2021. "The Impact of Financial Development on Decarbonization Factors of Carbon Emissions: A Global Perspective," International Journal of Energy Economics and Policy, Econjournals, vol. 11(6), pages 353-364.
    • Handle: RePEc:eco:journ2:2021-06-41
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    References listed on IDEAS

    as
    1. Parikh, Jyoti & Panda, Manoj & Ganesh-Kumar, A. & Singh, Vinay, 2009. "CO2 emissions structure of Indian economy," Energy, Elsevier, vol. 34(8), pages 1024-1031.
    2. Chun Jiang & Xiaoxin Ma, 2019. "The Impact of Financial Development on Carbon Emissions: A Global Perspective," Sustainability, MDPI, vol. 11(19), pages 1-22, September.
    3. Pedroni, Peter, 2004. "Panel Cointegration: Asymptotic And Finite Sample Properties Of Pooled Time Series Tests With An Application To The Ppp Hypothesis," Econometric Theory, Cambridge University Press, vol. 20(3), pages 597-625, June.
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    6. Papadis, Elisa & Tsatsaronis, George, 2020. "Challenges in the decarbonization of the energy sector," Energy, Elsevier, vol. 205(C).
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    Cited by:

    1. Umar Nawaz Kayani & Misbah Sadiq & Mustafa Raza Rabbani & Ahmet Faruk Aysan & Farrukh Nawaz Kayani, 2023. "Examining the Relationship between Economic Growth, Financial Development, and Carbon Emissions: A Review of the Literature and Scientometric Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 489-499, March.

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    More about this item

    Keywords

    Carbon dioxide emissions; Financial development; Urbanization; GDP per capita; Climate change; STIRPAT model.;
    All these keywords.

    JEL classification:

    • P44 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - National Income, Product, and Expenditure; Money; Inflation
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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