IDEAS home Printed from https://ideas.repec.org/a/sae/engenv/v35y2024i2p795-814.html
   My bibliography  Save this article

Impact of trade liberalization and renewable energy on load capacity factor: Evidence from novel dual adjustment approach

Author

Listed:
  • Wu Huilan
  • Seyi Saint Akadiri
  • Ilham Haouas
  • Abraham Ayobamiji Awosusi
  • Ada Tony Odu

Abstract

Several nations, including Mexico, are encountering problems with accomplishing the targets of sustainable development goals (SDGs). This study addresses how to develop SDG agenda for Mexico, which may also be applied to other emerging markets with comparable profiles. Therefore, this study utilizes a newly developed load capacity factor (LCF, a detailed environmental evaluation tool) that combines biocapacity (supply side) and ecological foot (demand side) to examine the effect of renewable energy consumption and trade openness on LCF while controlling for nonrenewable energy consumption and economic growth in the case of Mexico during 1970–2017. Using the dual adjustment approach, we find evidence of long-run cointegration nexus among the series. In addition, trade openness affects LCF positively, whereas renewable energy consumption, economic growth, and nonrenewable energy consumption impact LCF negatively. Furthermore, results of the frequency domain causality show that all the variables can predict LCF in the long-term. Based on these results, Mexico should focus on promoting public understanding of green energy and environmental preservation measures and participate in the production of nonenergy-consuming and ecologically friendly products while compelling polluting enterprises to migrate to countries with less stringent environmental restrictions.

Suggested Citation

  • Wu Huilan & Seyi Saint Akadiri & Ilham Haouas & Abraham Ayobamiji Awosusi & Ada Tony Odu, 2024. "Impact of trade liberalization and renewable energy on load capacity factor: Evidence from novel dual adjustment approach," Energy & Environment, , vol. 35(2), pages 795-814, March.
    • Handle: RePEc:sae:engenv:v:35:y:2024:i:2:p:795-814
    DOI: 10.1177/0958305X221137559
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0958305X221137559
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0958305X221137559?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
    ---><---

    References listed on IDEAS

    as
    1. Zivot, Eric & Andrews, Donald W K, 2002. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 25-44, January.
    2. Destek, Mehmet & Sinha, Avik, 2020. "Renewable, non-renewable energy consumption, economic growth, trade openness and ecological footprint: Evidence from organisation for economic Co-operation and development countries," MPRA Paper 104246, University Library of Munich, Germany, revised 2020.
    3. Korhan Gokmenoglu & Dervis Kirikkaleli & Baris Memduh Eren, 2019. "Time and frequency domain causality Testing: The causal linkage between FDI and economic risk for the case of Turkey," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 28(6), pages 649-667, August.
    4. Sharma, Rajesh & Sinha, Avik & Kautish, Pradeep, 2020. "Does renewable energy consumption reduce ecological footprint? Evidence from eight developing countries of Asia," MPRA Paper 104277, University Library of Munich, Germany, revised 2020.
    5. Ugur Korkut Pata, 2021. "Do renewable energy and health expenditures improve load capacity factor in the USA and Japan? A new approach to environmental issues," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(9), pages 1427-1439, December.
    6. Morten O. Ravn & Harald Uhlig, 2002. "On adjusting the Hodrick-Prescott filter for the frequency of observations," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 371-375.
    7. Mohsen Mehrara & Abbas Rezazadeh Karsalari & Maysam Musai, 2014. "The Relationship among Income, Openness and Environmental Quality: An ARDL Approach for the case of Iran," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(5), pages 32-40, May.
    8. Mustafa Ismihan, 2019. "The dual adjustment approach with an application to the consumption function," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 19(1), pages 1-8.
    9. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001. "Is Free Trade Good for the Environment?," American Economic Review, American Economic Association, vol. 91(4), pages 877-908, September.
    10. Abraham Ayobamiji Awosusi & Kaan Kutlay & Mehmet Altuntaş & Bakhtiyor Khodjiev & Ephraim Bonah Agyekum & Mokhtar Shouran & Mohamed Elgbaily & Salah Kamel, 2022. "A Roadmap toward Achieving Sustainable Environment: Evaluating the Impact of Technological Innovation and Globalization on Load Capacity Factor," IJERPH, MDPI, vol. 19(6), pages 1-16, March.
    11. Christian Bayer & Christoph Hanck, 2013. "Combining non-cointegration tests," Journal of Time Series Analysis, Wiley Blackwell, vol. 34(1), pages 83-95, January.
    12. Liu, Yaping & Sadiq, Farah & Ali, Wajahat & Kumail, Tafazal, 2022. "Does tourism development, energy consumption, trade openness and economic growth matters for ecological footprint: Testing the Environmental Kuznets Curve and pollution haven hypothesis for Pakistan," Energy, Elsevier, vol. 245(C).
    13. Pata, Ugur Korkut & Isik, Cem, 2021. "Determinants of the load capacity factor in China: A novel dynamic ARDL approach for ecological footprint accounting," Resources Policy, Elsevier, vol. 74(C).
    14. Breitung, Jorg & Candelon, Bertrand, 2006. "Testing for short- and long-run causality: A frequency-domain approach," Journal of Econometrics, Elsevier, vol. 132(2), pages 363-378, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hala Mohamed Sh Elmanaei & Wagdi M. S. Khalifa & Ayşen Berberoğlu, 2024. "Unpacking How Natural Gas, Digital Growth, and Hydro-Based Energy Sources Impact Ecological Sustainability in Egypt," Energies, MDPI, vol. 17(24), pages 1-16, December.

    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. Hossain, Mohammad Razib & Rana, Md. Jaber & Saha, Sourav Mohan & Haseeb, Mohammad & Islam, Md. Sayemul & Amin, Md. Ruhul & Hossain, Md. Emran, 2023. "Role of energy mix and eco-innovation in achieving environmental sustainability in the USA using the dynamic ARDL approach: Accounting the supply side of the ecosystem," Renewable Energy, Elsevier, vol. 215(C).
    2. Pata, Ugur Korkut & Kartal, Mustafa Tevfik & Erdogan, Sinan & Sarkodie, Samuel Asumadu, 2023. "The role of renewable and nuclear energy R&D expenditures and income on environmental quality in Germany: Scrutinizing the EKC and LCC hypotheses with smooth structural changes," Applied Energy, Elsevier, vol. 342(C).
    3. Pata, Ugur Korkut & Ertugrul, Hasan Murat, 2023. "Do the Kyoto Protocol, geopolitical risks, human capital and natural resources affect the sustainability limit? A new environmental approach based on the LCC hypothesis," Resources Policy, Elsevier, vol. 81(C).
    4. Shahzad, Umer & Ferraz, Diogo & Nguyen, Huu-Huan & Cui, Lianbiao, 2022. "Investigating the spill overs and connectedness between financial globalization, high-tech industries and environmental footprints: Fresh evidence in context of China," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    5. Hossain, Md. Emran & Islam, Md. Sayemul & Bandyopadhyay, Arunava & Awan, Ashar & Hossain, Mohammad Razib & Rej, Soumen, 2022. "Mexico at the crossroads of natural resource dependence and COP26 pledge: Does technological innovation help?," Resources Policy, Elsevier, vol. 77(C).
    6. Husam Rjoub & Jamiu Adetola Odugbesan & Tomiwa Sunday Adebayo & Wing-Keung Wong, 2021. "Investigating the Causal Relationships among Carbon Emissions, Economic Growth, and Life Expectancy in Turkey: Evidence from Time and Frequency Domain Causality Techniques," Sustainability, MDPI, vol. 13(5), pages 1-20, March.
    7. Emrah Beşe & H. Swint Friday & Salih Kalaycı, 2024. "Examining the Relationship between Inflation Instability and Ecological Footprint: Evidence from Turkey," International Journal of Energy Economics and Policy, Econjournals, vol. 14(2), pages 460-467, March.
    8. Ugur Korkut Pata & Banu Tanriover, 2023. "Is the Load Capacity Curve Hypothesis Valid for the Top Ten Tourism Destinations?," Sustainability, MDPI, vol. 15(2), pages 1-15, January.
    9. Sami Ur Rahman & Faisal Faisal & Fariha Sami & Adnan Ali & Rajnesh Chander & Muhammad Yusuf Amin, 2024. "Investigating the Nexus Between Inflation, Financial Development, and Carbon Emission: Empirical Evidence from FARDL and Frequency Domain Approach," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 292-318, March.
    10. Bui Hoang Ngoc, 2022. "Do Tourism Development and Globalization Reinforce Ecological Footprint? Evidence From RCEP Countries," SAGE Open, , vol. 12(4), pages 21582440221, December.
    11. Dervis Kirikkaleli & Andrew Adewale Alola, 2023. "The regime switching evidence of financial-economic-political risk in Turkey," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(4), pages 3747-3762, August.
    12. Li Chunling & Javed Ahmed Memon & Tiep Le Thanh & Minhaj Ali & Dervis Kirikkaleli, 2021. "The Impact of Public-Private Partnership Investment in Energy and Technological Innovation on Ecological Footprint: The Case of Pakistan," Sustainability, MDPI, vol. 13(18), pages 1-16, September.
    13. Ahmed Samour & Usman Mehmood & Magdalena Radulescu & Radu Alexandru Budu & Rares Mihai Nitu, 2023. "Examining the Role of Renewable Energy, Technological Innovation, and the Insurance Market in Environmental Sustainability in the United States: A Step toward COP26 Targets," Energies, MDPI, vol. 16(17), pages 1-15, August.
    14. Ma, Qiang & Khan, Zeeshan & Chen, Fuzhong & Murshed, Muntasir & Siqun, Yang & Kirikkaleli, Dervis, 2023. "Revisiting the nexus between house pricing and money demand: Power spectrum and wavelet coherence based approach," The Quarterly Review of Economics and Finance, Elsevier, vol. 87(C), pages 266-274.
    15. Muhammad Shahbaz & Saleheen Khan & Amjad Ali & Mita Bhattacharya, 2017. "The Impact Of Globalization On Co2 Emissions In China," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(04), pages 929-957, September.
    16. Oryani, Bahareh & Kamyab, Hesam & Mоridiаn, Аli & Azizi, Zahra & Rezania, Shahabaldin & Chelliapan, Shreeshivadasan, 2022. "Does structural change boost the energy demand in a fossil fuel-driven economy? New evidence from Iran," Energy, Elsevier, vol. 254(PC).
    17. Shahbaz, Muhammad & Mallick, Hrushikesh & Mahalik, Mantu Kumar & Sadorsky, Perry, 2016. "The role of globalization on the recent evolution of energy demand in India: Implications for sustainable development," Energy Economics, Elsevier, vol. 55(C), pages 52-68.
    18. Uche, Emmanuel & Ngepah, Nicholas & Das, Narasingha & Dey, Labani, 2024. "Dynamic interactions of green innovations, green transitions and ecological load capacity factor in BRICS," Renewable Energy, Elsevier, vol. 231(C).
    19. Nathaniel Solomon Prince, 2021. "Natural Resources, Urbanisation, Economic Growth and the Ecological Footprint in South Africa: The Moderating Role of Human Capital," Quaestiones Geographicae, Sciendo, vol. 40(2), pages 63-76, June.
    20. Erdogan, Sinan, 2024. "On the impact of natural resources on environmental sustainability in African countries: A comparative approach based on the EKC and LCC hypotheses," Resources Policy, Elsevier, vol. 88(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:sae:engenv:v:35:y:2024:i:2:p:795-814. 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: SAGE Publications (email available below). General contact details of provider: .

    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.