IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v17y2024i16p4011-d1455436.html
   My bibliography  Save this article

Dynamic Linkages among Carbon Emissions, Artificial Intelligence, Economic Policy Uncertainty, and Renewable Energy Consumption: Evidence from East Asia and Pacific Countries

Author

Listed:
  • Salman Ali Shah

    (Academy of China-ASEAN International and Regional Studies, Guangxi Minzu University, Nanning 530006, China)

  • Xingyi Ye

    (Academy of China-ASEAN International and Regional Studies, Guangxi Minzu University, Nanning 530006, China)

  • Bo Wang

    (School of Politics and Public Administration, Guangxi Minzu University, Nanning 530006, China)

  • Xiangjun Wu

    (Academy of China-ASEAN International and Regional Studies, Guangxi Minzu University, Nanning 530006, China)

Abstract

A growing number of countries are concerned about the reliability of environmental indicators; as a result, there is a pressing need to find ways to improve ecological welfare on a global scale. This study investigates the dynamic linkages among CO 2 emissions, AI, economic policy uncertainty (EPU), and renewable energy consumption. To analyze these relationships empirically, this study used panel data for East Asian and Pacific countries from 2000 to 2023. This study used fully modified ordinary least squares (FMOLSs), dynamic ordinary least squares (DOLSs), Hausman fixed effects (FEs) and random effects (REs), the generalized method of moments (GMM), and variance decomposition tests. This study’s results show that AI has a positive relationship with CO 2 emissions in terms of the benchmark regression, while it shows minimal impact on CO 2 emissions according to the variance decomposition test. Similarly, economic policy uncertainty shows a strong positive relationship with CO 2 emissions through benchmark regression FEs and REs, GMM, and the variance decomposition test. An increase in EPU will positively affect CO 2 emissions. Renewable energy consumption has a strong negative impact on CO 2 emissions in East Asian and Pacific countries. These findings reveal that a unit increase in renewable energy consumption will decrease CO 2 emissions. Based on the results of this study, it is suggested that policy certainty and an upsurge in renewable energy consumption are essential for environmental upgrading. In contrast, adopting AI has no robust effect on ecological degradation (CO 2 emissions). East Asian and Pacific countries need to focus on the adoption of renewables, as well as the control of economic policy uncertainty. While AI in East Asian and Pacific countries is still in the initial stage of adoption, policy formation is essential to overcome the possible carbon footprint of AI in the short term.

Suggested Citation

  • Salman Ali Shah & Xingyi Ye & Bo Wang & Xiangjun Wu, 2024. "Dynamic Linkages among Carbon Emissions, Artificial Intelligence, Economic Policy Uncertainty, and Renewable Energy Consumption: Evidence from East Asia and Pacific Countries," Energies, MDPI, vol. 17(16), pages 1-23, August.
    • Handle: RePEc:gam:jeners:v:17:y:2024:i:16:p:4011-:d:1455436
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/17/16/4011/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/17/16/4011/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hu, Hui & Xie, Nan & Fang, Debin & Zhang, Xiaoling, 2018. "The role of renewable energy consumption and commercial services trade in carbon dioxide reduction: Evidence from 25 developing countries," Applied Energy, Elsevier, vol. 211(C), pages 1229-1244.
    2. Fagerberg, Jan, 1994. "Technology and International Differences in Growth Rates," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1147-1175, September.
    3. Wang, Jianda & Dong, Xiucheng & Dong, Kangyin, 2022. "How does ICT agglomeration affect carbon emissions? The case of Yangtze River Delta urban agglomeration in China," Energy Economics, Elsevier, vol. 111(C).
    4. Hashem Pesaran, M. & Yamagata, Takashi, 2008. "Testing slope homogeneity in large panels," Journal of Econometrics, Elsevier, vol. 142(1), pages 50-93, January.
    5. Scott R. Baker & Nicholas Bloom & Steven J. Davis, 2016. "Measuring Economic Policy Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(4), pages 1593-1636.
    6. Juan Huang & Ziyi Wu, 2022. "Impact of Environmental Regulations on Export Trade—Empirical Analysis Based on Zhejiang Province," IJERPH, MDPI, vol. 19(19), pages 1-14, October.
    7. Yasir Khan & Qiu Bin & Taimoor Hassan, 2019. "The impact of climate changes on agriculture export trade in Pakistan: Evidence from time‐series analysis," Growth and Change, Wiley Blackwell, vol. 50(4), pages 1568-1589, December.
    8. Ewing, Bradley T. & Payne, James E. & Caporin, Massimilano, 2022. "The Asymmetric Impact of Oil Prices and Production on Drilling Rig Trajectory: A correction," Resources Policy, Elsevier, vol. 79(C).
    9. Bartleet, Matthew & Gounder, Rukmani, 2010. "Energy consumption and economic growth in New Zealand: Results of trivariate and multivariate models," Energy Policy, Elsevier, vol. 38(7), pages 3508-3517, July.
    10. Joysri Acharyya, 2009. "Fdi, Growth And The Environment: Evidence From India On Co2 Emission During The Last Two Decades," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 34(1), pages 43-58, June.
    11. Adams, Samuel & Adedoyin, Festus & Olaniran, Eniola & Bekun, Festus Victor, 2020. "Energy consumption, economic policy uncertainty and carbon emissions; causality evidence from resource rich economies," Economic Analysis and Policy, Elsevier, vol. 68(C), pages 179-190.
    12. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    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. Muhammad Sadiq & Syed Tauseef Hassan & Irfan Khan & Mohammad Mafizur Rahman, 2024. "Policy uncertainty, renewable energy, corruption and CO2 emissions nexus in BRICS-1 countries: a panel CS-ARDL approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(8), pages 21595-21621, August.
    2. Zribi, Wissal & Boufateh, Talel & Lahouel, Bechir Ben & Urom, Christian, 2024. "Uncertainty shocks, investor sentiment and environmental performance: Novel evidence from a PVAR approach," International Review of Financial Analysis, Elsevier, vol. 93(C).
    3. Wei, Wei & Hu, Haiqing & Chang, Chun-Ping, 2022. "Why the same degree of economic policy uncertainty can produce different outcomes in energy efficiency? New evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 467-481.
    4. Muhammad Khalid Anser & Qasim Raza Syed & Hooi Hooi Lean & Andrew Adewale Alola & Munir Ahmad, 2021. "Do Economic Policy Uncertainty and Geopolitical Risk Lead to Environmental Degradation? Evidence from Emerging Economies," Sustainability, MDPI, vol. 13(11), pages 1-15, May.
    5. Khan, Anwar & Chenggang, Yang & Hussain, Jamal & Kui, Zhou, 2021. "Impact of technological innovation, financial development and foreign direct investment on renewable energy, non-renewable energy and the environment in belt & Road Initiative countries," Renewable Energy, Elsevier, vol. 171(C), pages 479-491.
    6. Qamruzzaman, Md & Jianguo, Wei, 2020. "The asymmetric relationship between financial development, trade openness, foreign capital flows, and renewable energy consumption: Fresh evidence from panel NARDL investigation," Renewable Energy, Elsevier, vol. 159(C), pages 827-842.
    7. Zhou, Anhua & Li, Jun, 2022. "How do trade liberalization and human capital affect renewable energy consumption? Evidence from the panel threshold model," Renewable Energy, Elsevier, vol. 184(C), pages 332-342.
    8. Zakari, Abdulrasheed & Li, Guo & Khan, Irfan & Jindal, Abhinav & Tawiah, Vincent & Alvarado, Rafael, 2022. "Are abundant energy resources and Chinese business a solution to environmental prosperity in Africa?," Energy Policy, Elsevier, vol. 163(C).
    9. Zhao Liu & Lan-Ye Wei, 2022. "Effects of ODI and export trade structure on CO2 emissions in China: nonlinear relationships," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(12), pages 13630-13656, December.
    10. Lin, Shu & Razzaq, Asif & Yi, Kefu, 2023. "Heterogenous influence of productive capacities pillars and natural resources on ecological sustainability in developing Belt and Road host countries," Resources Policy, Elsevier, vol. 85(PA).
    11. Zhao, Yunying & Wang, Wenju & Liang, Zhentang & Luo, Peng, 2024. "Racing towards zero carbon: Unraveling the interplay between natural resource rents, green innovation, geopolitical risk and environmental pollution in BRICS countries," Resources Policy, Elsevier, vol. 88(C).
    12. Dao, Ngoc Bich & Truong, Huong Hoang Diep & Shahbaz, Muhammad & Chu, Lan Khanh, 2024. "The impacts of natural resources rents diversification, uncertainty, and environmental technologies on ecological sustainability: Empirical evidence from OECD countries," Resources Policy, Elsevier, vol. 91(C).
    13. Qamruzzaman, Md & Karim, Salma & Jahan, Ishrat, 2022. "Nexus between economic policy uncertainty, foreign direct investment, government debt and renewable energy consumption in 13 top oil importing nations: Evidence from the symmetric and asymmetric inves," Renewable Energy, Elsevier, vol. 195(C), pages 121-136.
    14. Müller, Karsten, 2020. "German forecasters' narratives: How informative are German business cycle forecast reports?," Working Papers 23, German Research Foundation's Priority Programme 1859 "Experience and Expectation. Historical Foundations of Economic Behaviour", Humboldt University Berlin.
    15. Omri, Anis, 2014. "An international literature survey on energy-economic growth nexus: Evidence from country-specific studies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 951-959.
    16. Rusiadi Rusiadi & Muhammad Hidayat & Dewi Mahrani Rangkuty & Kiki Farida Ferine & Jumadil Saputra, 2024. "The Influence of Natural Resources, Energy Consumption, and Renewable Energy on Economic Growth in ASEAN Region Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 14(3), pages 332-338, May.
    17. Gerard Bikorimana & Charles Rutikanga & Didier Mwizerwa, 2020. "Linking energy consumption with economic growth: Rwanda as a case study," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2020(2), pages 181-200.
    18. Wang, Hao & Han, Yonghui & Fidrmuc, Jan & Wei, Dongming, 2021. "Confucius Institute, Belt and Road Initiative, and Internationalization," International Review of Economics & Finance, Elsevier, vol. 71(C), pages 237-256.
    19. Ibrahim D. Raheem & Sara le Roux & Simplice A. Asongu, 2019. "The Role of Asymmetry and Uncertainties in the Capital Flows- Economic Growth Nexus," Research Africa Network Working Papers 19/047, Research Africa Network (RAN).
    20. Panagiotidis, Theodore & Printzis, Panagiotis, 2020. "What is the investment loss due to uncertainty?," Global Finance Journal, Elsevier, vol. 45(C).

    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:gam:jeners:v:17:y:2024:i:16:p:4011-:d:1455436. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.