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CO 2 Emissions Embodied in International Trade and Economic Growth: Empirical Evidence for OECD and Non-OECD Countries

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  • Hyunsoo Kang

    (Department of International Trade, Wonkwang University, Iksan 54538, Korea)

Abstract

This study examined the relationship between CO 2 emissions embodied in international trade and economic growth for OECD and non-OECD countries between 2005 and 2015. Unlike the traditional environmental Kuznets curve (EKC) hypothesis, which does not account for trade patterns, CO 2 emissions embodied in trade balances were adopted in several models. To analyze the panel series, this study utilized econometric procedures: panel regression, the panel unit root test, the panel cointegration test, and panel Granger causality. To investigate evidence supporting the pollution haven hypothesis (PHH), this study constructed an equation including CO 2 emissions embodied in net exports as a proportion of consumption. The results from the panel regression model validated the EKC hypothesis, even considering the CO 2 emissions embodied in trade. Results of the panel unit root, panel cointegration, and Granger causality tests showed that CO 2 emissions embodied in trade and economic growth have bi-directional Granger causality. This study provided evidence for the PHH, although some upper countries of net exporters or net importers for CO 2 emissions can be observed. This study highlighted the need to intensify international cooperation to decrease environmental pollutants in both developed and developing countries, and considered the importance of CO 2 emissions embodied in trade by expanding globalization.

Suggested Citation

  • Hyunsoo Kang, 2021. "CO 2 Emissions Embodied in International Trade and Economic Growth: Empirical Evidence for OECD and Non-OECD Countries," Sustainability, MDPI, vol. 13(21), pages 1-20, November.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:21:p:12114-:d:670818
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    2. Godwin Imo Ibe & Hillary Chijindu Ezeaku & Itiri Idam Okpara & Eze Festus Eze & Ebele Igwemeka & Obinna Ubani, 2024. "Asymmetric effect of environmental tax on CO2 emissions embodied in domestic final demand in South Africa: A NARDL approach," African Development Review, African Development Bank, vol. 36(1), pages 55-69, March.
    3. Cengizhan Karaca, 2023. "Dynamics of Trade Credit, Bank Credit Extension, Sustainable Economic Growth, and Imports: Evidence from the European Non-Financial Sector," Sustainability, MDPI, vol. 15(17), pages 1-24, August.
    4. Altanshagai Batmunkh & Agus Dwi Nugroho & Maria Fekete-Farkas & Zoltan Lakner, 2022. "Global Challenges and Responses: Agriculture, Economic Globalization, and Environmental Sustainability in Central Asia," Sustainability, MDPI, vol. 14(4), pages 1-21, February.

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