IDEAS home Printed from https://ideas.repec.org/a/eee/renene/v189y2022icp454-466.html
   My bibliography  Save this article

The impact of renewable energy, internet use and foreign direct investment on carbon dioxide emissions: A method of moments quantile analysis

Author

Listed:
  • Awan, Ashar
  • Abbasi, Kashif Raza
  • Rej, Soumen
  • Bandyopadhyay, Arunava
  • Lv, Kangjuan

Abstract

The current era of industrial development and innovation is revolutionized using the internet, robotics, and artificial intelligence. Nevertheless, the appraisal of global economic progress shows increasing trends, there are environmental degradation issues associated with this improvement. The role of renewable energy, urbanization and foreign direct investment received a lot of attention in the literature on environmental issues, however, the simultaneity with information communication technology is missing. Therefore, the present study used data from 10 emerging countries during 1996–2015 and applied the novel Method of Moments Quantile Regression to analyze the nexus among the variables. Further, we applied the second-generation unit root test, and Driscoll Kraay standard errors to reach robust results. The findings revealed an inverted U-shape relationship between economic growth and environmental degradation; thus, the validity of the Environmental Kuznets Curve is revealed. Moreover, foreign direct investment is significant and positive at 0.05th-0.50th quantiles, however, it becomes insignificant at higher quantile levels. Urbanization enhances while renewable energy mitigates carbon dioxide emissions at all quantile levels. Information communication technology proxied by internet usage reduces environmental degradation significantly at 0.25th-0.95th quantile levels. Results of the study suggest insights for the policymakers to mitigate carbon dioxide emissions through encouraging renewable energy and internet use.

Suggested Citation

  • Awan, Ashar & Abbasi, Kashif Raza & Rej, Soumen & Bandyopadhyay, Arunava & Lv, Kangjuan, 2022. "The impact of renewable energy, internet use and foreign direct investment on carbon dioxide emissions: A method of moments quantile analysis," Renewable Energy, Elsevier, vol. 189(C), pages 454-466.
    • Handle: RePEc:eee:renene:v:189:y:2022:i:c:p:454-466
    DOI: 10.1016/j.renene.2022.03.017
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0960148122002944
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.renene.2022.03.017?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rehman, Mobeen Ur & Rashid, Mushab, 2017. "Energy consumption to environmental degradation, the growth appetite in SAARC nations," Renewable Energy, Elsevier, vol. 111(C), pages 284-294.
    2. Muhammad Shahbaz & Smile Dube & Ilhan Ozturk & Abdul Jalil, 2015. "Testing the Environmental Kuznets Curve Hypothesis in Portugal," International Journal of Energy Economics and Policy, Econjournals, vol. 5(2), pages 475-481.
    3. Sweety Pandey & Mrutyunjaya Mishra, 2015. "CO2 Emissions and Economic Growth of SAARC Countries: Evidence from a Panel VAR Analysis," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 1(2), pages 23-33, December.
    4. Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
    5. Mohammed Musah & Yusheng Kong & Isaac Adjei Mensah & Stephen Kwadwo Antwi & Mary Donkor, 2021. "The connection between urbanization and carbon emissions: a panel evidence from West Africa," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(8), pages 11525-11552, August.
    6. Machado, José A.F. & Santos Silva, J.M.C., 2019. "Quantiles via moments," Journal of Econometrics, Elsevier, vol. 213(1), pages 145-173.
    7. Moomaw, Ronald L. & Shatter, Ali M., 1996. "Urbanization and Economic Development: A Bias toward Large Cities?," Journal of Urban Economics, Elsevier, vol. 40(1), pages 13-37, July.
    8. Fernández-Amador, Octavio & Francois, Joseph F. & Oberdabernig, Doris A. & Tomberger, Patrick, 2017. "Carbon Dioxide Emissions and Economic Growth: An Assessment Based on Production and Consumption Emission Inventories," Ecological Economics, Elsevier, vol. 135(C), pages 269-279.
    9. Ivan A. Canay, 2011. "A simple approach to quantile regression for panel data," Econometrics Journal, Royal Economic Society, vol. 14(3), pages 368-386, October.
    10. Koenker, Roger, 2004. "Quantile regression for longitudinal data," Journal of Multivariate Analysis, Elsevier, vol. 91(1), pages 74-89, October.
    11. Fujii, Hidemichi & Managi, Shunsuke, 2013. "Which industry is greener? An empirical study of nine industries in OECD countries," Energy Policy, Elsevier, vol. 57(C), pages 381-388.
    12. Joakim Westerlund, 2007. "Testing for Error Correction in Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(6), pages 709-748, December.
    13. Abbasi, Kashif Raza & Hussain, Khadim & Redulescu, Magdalena & Ozturk, Ilhan, 2021. "Does natural resources depletion and economic growth achieve the carbon neutrality target of the UK? A way forward towards sustainable development," Resources Policy, Elsevier, vol. 74(C).
    14. Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
    15. Asongu, Simplice A. & Le Roux, Sara, 2017. "Enhancing ICT for inclusive human development in Sub-Saharan Africa," Technological Forecasting and Social Change, Elsevier, vol. 118(C), pages 44-54.
    16. Dong, Kangyin & Hochman, Gal & Zhang, Yaqing & Sun, Renjin & Li, Hui & Liao, Hua, 2018. "CO2 emissions, economic and population growth, and renewable energy: Empirical evidence across regions," Energy Economics, Elsevier, vol. 75(C), pages 180-192.
    17. Salahuddin, Mohammad & Alam, Khorshed & Ozturk, Ilhan, 2016. "The effects of Internet usage and economic growth on CO2 emissions in OECD countries: A panel investigation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 1226-1235.
    18. Jeyhun I. Mikayilov & Marzio Galeotti & Fakhri J. Hasanov, 2018. "The Impact of Economic Growth on CO2 Emissions in Azerbaijan," IEFE Working Papers 102, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    19. Murshed, Muntasir & Dao, Nhung Thi Tuyet, 2020. "Revisiting the EKC hypothesis in South Asia: The role of Export Quality Improvement," MPRA Paper 111620, University Library of Munich, Germany, revised 2020.
    20. Salim, Ruhul A. & Shafiei, Sahar, 2014. "Urbanization and renewable and non-renewable energy consumption in OECD countries: An empirical analysis," Economic Modelling, Elsevier, vol. 38(C), pages 581-591.
    21. Dimelis, Sophia P. & Papaioannou, Sotiris K., 2011. "ICT growth effects at the industry level: A comparison between the US and the EU," Information Economics and Policy, Elsevier, vol. 23(1), pages 37-50, March.
    22. Abbasi, Kashif Raza & Hussain, Khadim & Haddad, Akram Masoud & Salman, Asma & Ozturk, Ilhan, 2022. "The role of Financial Development and Technological Innovation towards Sustainable Development in Pakistan: Fresh insights from consumption and territory-based emissions," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    23. Mary O'Mahony & Michela Vecchi, 2005. "Quantifying the Impact of ICT Capital on Output Growth: A Heterogeneous Dynamic Panel Approach," Economica, London School of Economics and Political Science, vol. 72(288), pages 615-633, November.
    24. Zaman, Khalid & Moemen, Mitwali Abd-el., 2017. "Energy consumption, carbon dioxide emissions and economic development: Evaluating alternative and plausible environmental hypothesis for sustainable growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 1119-1130.
    25. Simplice A. Asongu & Jacinta C. Nwachukwu, 2017. "Not all that glitters is gold: ICT and inclusive human development in Sub-Saharan Africa," International Journal of Happiness and Development, Inderscience Enterprises Ltd, vol. 3(4), pages 303-322.
    26. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    27. Ajmi, Ahdi Noomen & Hammoudeh, Shawkat & Nguyen, Duc Khuong & Sato, João Ricardo, 2015. "On the relationships between CO2 emissions, energy consumption and income: The importance of time variation," Energy Economics, Elsevier, vol. 49(C), pages 629-638.
    28. Hadi Esmaeilpour Moghadam & Vahid Dehbashi, 2018. "The impact of financial development and trade on environmental quality in Iran," Empirical Economics, Springer, vol. 54(4), pages 1777-1799, June.
    29. Menegaki, Angeliki N., 2011. "Growth and renewable energy in Europe: A random effect model with evidence for neutrality hypothesis," Energy Economics, Elsevier, vol. 33(2), pages 257-263, March.
    30. Hamdi, Helmi & Sbia, Rashid & Shahbaz, Muhammad, 2014. "The nexus between electricity consumption and economic growth in Bahrain," Economic Modelling, Elsevier, vol. 38(C), pages 227-237.
    31. Faran Ahmed & Muhammad Naeem & Muhammad Iqbal, 2017. "ICT and renewable energy: a way forward to the next generation telecom base stations," Telecommunication Systems: Modelling, Analysis, Design and Management, Springer, vol. 64(1), pages 43-56, January.
    32. Abbasi, Kashif Raza & Adedoyin, Festus Fatai & Abbas, Jaffar & Hussain, Khadim, 2021. "The impact of energy depletion and renewable energy on CO2 emissions in Thailand: Fresh evidence from the novel dynamic ARDL simulation," Renewable Energy, Elsevier, vol. 180(C), pages 1439-1450.
    33. Funk, Jeffrey L., 2015. "IT and sustainability: New strategies for reducing carbon emissions and resource usage in transportation," Telecommunications Policy, Elsevier, vol. 39(10), pages 861-874.
    34. Antonio Musolesi & Massimiliano Mazzanti & Roberto Zoboli, 2010. "A panel data heterogeneous Bayesian estimation of environmental Kuznets curves for CO2 emissions," Applied Economics, Taylor & Francis Journals, vol. 42(18), pages 2275-2287.
    35. Liddle, Brantley, 2015. "What Are the Carbon Emissions Elasticities for Income and Population? Bridging STIRPAT and EKC via robust heterogeneous panel estimates," MPRA Paper 61304, University Library of Munich, Germany.
    36. Li, Tingting & Wang, Yong & Zhao, Dingtao, 2016. "Environmental Kuznets Curve in China: New evidence from dynamic panel analysis," Energy Policy, Elsevier, vol. 91(C), pages 138-147.
    37. Oro, Oro Ufuo & Alagidede, Imoptep Paul, 2021. "Does petroleum resources or market size drive foreign direct investment in Africa? New evidence from time-series analysis," Resources Policy, Elsevier, vol. 71(C).
    38. Abbasi, Kashif Raza & Shahbaz, Muhammad & Zhang, Jinjun & Irfan, Muhammad & Alvarado, Rafael, 2022. "Analyze the environmental sustainability factors of China: The role of fossil fuel energy and renewable energy," Renewable Energy, Elsevier, vol. 187(C), pages 390-402.
    39. Sadorsky, Perry, 2014. "The effect of urbanization on CO2 emissions in emerging economies," Energy Economics, Elsevier, vol. 41(C), pages 147-153.
    40. Pal, Debdatta & Mitra, Subrata Kumar, 2017. "The environmental Kuznets curve for carbon dioxide in India and China: Growth and pollution at crossroad," Journal of Policy Modeling, Elsevier, vol. 39(2), pages 371-385.
    41. Ruhul Salim & Shuddhasattwa Rafiq & Sahar Shafiei & Yao Yao, 2019. "Does urbanization increase pollutant emission and energy intensity? evidence from some Asian developing economies," Applied Economics, Taylor & Francis Journals, vol. 51(36), pages 4008-4024, August.
    42. Nasir, Muhammad & Ur Rehman, Faiz, 2011. "Environmental Kuznets Curve for carbon emissions in Pakistan: An empirical investigation," Energy Policy, Elsevier, vol. 39(3), pages 1857-1864, March.
    43. Cole, Matthew A., 2004. "Trade, the pollution haven hypothesis and the environmental Kuznets curve: examining the linkages," Ecological Economics, Elsevier, vol. 48(1), pages 71-81, January.
    44. Hashemizadeh, Ali & Bui, Quocviet & Kongbuamai, Nattapan, 2021. "Unpacking the role of public debt in renewable energy consumption: New insights from the emerging countries," Energy, Elsevier, vol. 224(C).
    45. Wang, Di & Zhou, Tao & Wang, Mengmeng, 2021. "Information and communication technology (ICT), digital divide and urbanization: Evidence from Chinese cities," Technology in Society, Elsevier, vol. 64(C).
    46. Doytch, Nadia & Narayan, Seema, 2016. "Does FDI influence renewable energy consumption? An analysis of sectoral FDI impact on renewable and non-renewable industrial energy consumption," Energy Economics, Elsevier, vol. 54(C), pages 291-301.
    47. Kais, Saidi & Sami, Hammami, 2016. "An econometric study of the impact of economic growth and energy use on carbon emissions: Panel data evidence from fifty eight countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 1101-1110.
    48. Kasman, Adnan & Duman, Yavuz Selman, 2015. "CO2 emissions, economic growth, energy consumption, trade and urbanization in new EU member and candidate countries: A panel data analysis," Economic Modelling, Elsevier, vol. 44(C), pages 97-103.
    49. Abbasi, Kashif Raza & Shahbaz, Muhammad & Jiao, Zhilun & Tufail, Muhammad, 2021. "How energy consumption, industrial growth, urbanization, and CO2 emissions affect economic growth in Pakistan? A novel dynamic ARDL simulations approach," Energy, Elsevier, vol. 221(C).
    50. Moyer, Jonathan D. & Hughes, Barry B., 2012. "ICTs: Do they contribute to increased carbon emissions?," Technological Forecasting and Social Change, Elsevier, vol. 79(5), pages 919-931.
    51. Poumanyvong, Phetkeo & Kaneko, Shinji, 2010. "Does urbanization lead to less energy use and lower CO2 emissions? A cross-country analysis," Ecological Economics, Elsevier, vol. 70(2), pages 434-444, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chien, Fengsheng & Anwar, Ahsan & Hsu, Ching-Chi & Sharif, Arshian & Razzaq, Asif & Sinha, Avik, 2021. "The role of information and communication technology in encountering environmental degradation: Proposing an SDG framework for the BRICS countries," Technology in Society, Elsevier, vol. 65(C).
    2. Khan, Yasir & Hassan, Taimoor & Guiqin, Huang & Nabi, Ghulam, 2023. "Analyzing the impact of natural resources and rule of law on sustainable environment: A proposed policy framework for BRICS economies," Resources Policy, Elsevier, vol. 86(PA).
    3. Anwar, Ahsan & Siddique, Muhammad & Eyup Dogan, & Sharif, Arshian, 2021. "The moderating role of renewable and non-renewable energy in environment-income nexus for ASEAN countries: Evidence from Method of Moments Quantile Regression," Renewable Energy, Elsevier, vol. 164(C), pages 956-967.
    4. Muhammad Shahbaz & Avik Sinha, 2019. "Environmental Kuznets curve for CO2emissions: a literature survey," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 46(1), pages 106-168, January.
    5. Shahbaz, Muhammad & Sinha, Avik, 2019. "Environmental Kuznets Curve for CO2 emission: A survey of empirical literature," MPRA Paper 100257, University Library of Munich, Germany, revised 2019.
    6. Yang, Mian & Wang, En-Ze & Hou, Yaru, 2021. "The relationship between manufacturing growth and CO2 emissions: Does renewable energy consumption matter?," Energy, Elsevier, vol. 232(C).
    7. Chien, FengSheng, 2022. "How renewable energy and non-renewable energy affect environmental excellence in N-11 economies?," Renewable Energy, Elsevier, vol. 196(C), pages 526-534.
    8. Dogan, Eyup & Seker, Fahri, 2016. "The influence of real output, renewable and non-renewable energy, trade and financial development on carbon emissions in the top renewable energy countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 1074-1085.
    9. Sun, Yunpeng & Bao, Qun & Siao-Yun, Wei & Islam, Misbah ul & Razzaq, Asif, 2022. "Renewable energy transition and environmental sustainability through economic complexity in BRICS countries: Fresh insights from novel Method of Moments Quantile regression," Renewable Energy, Elsevier, vol. 184(C), pages 1165-1176.
    10. Hussain, Jamal & Khan, Anwar & Zhou, Kui, 2020. "The impact of natural resource depletion on energy use and CO2 emission in Belt & Road Initiative countries: A cross-country analysis," Energy, Elsevier, vol. 199(C).
    11. Dogan, Eyup & Seker, Fahri, 2016. "Determinants of CO2 emissions in the European Union: The role of renewable and non-renewable energy," Renewable Energy, Elsevier, vol. 94(C), pages 429-439.
    12. Emad Kazemzadeh & José Alberto Fuinhas & Matheus Koengkan & Fariba Osmani, 2022. "The Heterogeneous Effect of Economic Complexity and Export Quality on the Ecological Footprint: A Two-Step Club Convergence and Panel Quantile Regression Approach," Sustainability, MDPI, vol. 14(18), pages 1-24, September.
    13. Radmehr, Riza & Henneberry, Shida Rastegari & Shayanmehr, Samira, 2021. "Renewable Energy Consumption, CO2 Emissions, and Economic Growth Nexus: A Simultaneity Spatial Modeling Analysis of EU Countries," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 13-27.
    14. Muhammad Imran & Sajid Ali & Yousef Shahwan & Jijian Zhang & Issa Ahmad Al-Swiety, 2022. "Analyzing the Effects of Renewable and Nonrenewable Energy Usage and Technological Innovation on Environmental Sustainability: Evidence from QUAD Economies," Sustainability, MDPI, vol. 14(23), pages 1-16, November.
    15. Myo Myo Htike & Anil Shrestha & Makoto Kakinaka, 2022. "Investigating whether the environmental Kuznets curve hypothesis holds for sectoral CO2 emissions: evidence from developed and developing countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(11), pages 12712-12739, November.
    16. Belaïd, Fateh & Zrelli, Maha Harbaoui, 2019. "Renewable and non-renewable electricity consumption, environmental degradation and economic development: Evidence from Mediterranean countries," Energy Policy, Elsevier, vol. 133(C).
    17. Guglielmo Maria Caporale & Gloria Claudio-Quiroga & Luis A. Gil-Alana, 2021. "Analysing the relationship between CO2 emissions and GDP in China: a fractional integration and cointegration approach," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-16, December.
    18. Usman, Muhammad & Khalid, Khaizran & Mehdi, Muhammad Abuzar, 2021. "What determines environmental deficit in Asia? Embossing the role of renewable and non-renewable energy utilization," Renewable Energy, Elsevier, vol. 168(C), pages 1165-1176.
    19. Le Hoang Phong, 2019. "Globalization, Financial Development, and Environmental Degradation in the Presence of Environmental Kuznets Curve: Evidence from ASEAN-5 Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 9(2), pages 40-50.
    20. Lau, Lin-Sea & Choong, Chee-Keong & Ng, Cheong-Fatt & Liew, Feng-Mei & Ching, Suet-Ling, 2019. "Is nuclear energy clean? Revisit of Environmental Kuznets Curve hypothesis in OECD countries," Economic Modelling, Elsevier, vol. 77(C), pages 12-20.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:renene:v:189:y:2022:i:c:p:454-466. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/renewable-energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.