The effect of import product diversification on carbon emissions: New evidence for sustainable economic policies

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Hu G., Can M., Paramati S. R., DOĞAN B., Fang J.

Economic Analysis and Policy, vol.65, pp.198-210, 2020 (SSCI) identifier

  • Publication Type: Article / Article
  • Volume: 65
  • Publication Date: 2020
  • Doi Number: 10.1016/j.eap.2020.01.004
  • Journal Name: Economic Analysis and Policy
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, IBZ Online, EconLit
  • Page Numbers: pp.198-210
  • Keywords: AMG estimator, Carbon emissions, Import product diversification, Renewable energy
  • Hakkari University Affiliated: Yes

Abstract

This study examines the effect of import product diversification and renewable energy consumption on CO2 emissions across a panel of 35 developed and 93 developing economies. The empirical models utilize an environmental theoretical framework and yearly data for 1995–2014. The study makes use of common correlated effects—specifically mean group (CCE-MG) and augmented mean group (AMG) estimators. The overall results suggest that import product diversification has a substantial negative and positive impact on the carbon emissions of developed and developing economies, respectively. This study also finds that increasing renewable energy consumption helps to meet climate change targets by reducing carbon emissions. Thus, import product diversification and renewable energy could play an indispensable role in reducing carbon emissions in developed economies; while renewable energy is the only factor that assists developing economies meet their emission reduction targets at this stage.