Drivers of CO2-Emissions in Fossil Fuel Abundant Settings: (Pooled) Mean Group and Nonparametric Panel Analyses
Abstract
:1. Introduction
2. A Brief Literature Review
2.1. Income–Environment Relationship—The “Black Box”
2.2. Inside the “Black Box”
- Q 1:
- Does the inverted U-shaped IER hold in the case of the oil-producing countries?
- Q 2:
- What is the net carbon-footprint of fossil-fuel abundance on the level of carbon dioxide emissions?
- Q 3:
- What are the essential drivers of carbon dioxide emissions in oil-producing countries?
3. Methodology
3.1. Multicollinearity and Confounding Variable Issues in Ecological Analyses
3.2. Parametric Specification
3.3. Pooled Mean Group Estimators and Dynamic Fixed Effects
3.4. Nonparametric Fixed Effect Panel Analysis
4. Data
5. Estimation Results
5.1. Parametric PMG Regressions
5.2. Nonparametric Analysis
6. Concluding Remarks
Supplementary Materials
Author Contributions
Funding
Conflicts of Interest
Appendix A
Appendix A.1. Variation Inflation Factor Statistics
Variable | Variation Inflation Factor (VIF) | 1/VIF |
lnMVA | 6.70 | 0.149278 |
lnTVA | 6.63 | 0.150771 |
ln_PCI | 2.00 | 0.500452 |
ln_Power_fossils | 1.64 | 0.609550 |
lnOil_Sh | 1.35 | 0.738673 |
MEAN VIF | 3.66 |
Appendix A.2. Correlation Matrix of XTPMG Model
Appendix A.3. List of Countries in the Estimations
Algeria, Angola, Argentina, Australia, Azerbaijan, Bahrain, Brazil, Brunei, Cameroon, Chad, Congo Rep., Ecuador, Egypt, Equatorial Guinea, Gabon, Ghana, Indonesia, Iran, Iraq, Kazakhstan, Kuwait, Libya, Malaysia, Mexico, Nigeria, Norway, Oman, Pakistan, Qatar, Russia, Saudi Arabia, Syria, Thailand, Trinidad and Tobago, Turkmenistan, UAE, Venezuela, Vietnam |
Appendix A.4. Parsimonious PMG-Model to Assess the EKC Hypothesis
Variables | (1) | (2) |
Long Run | Short Run | |
Error Correction Term | −0.333 *** | |
(0.0465) | ||
D.ln_PCI | 0.366 ** | |
(0.170) | ||
L2D.ln_PCI2 | 0.0272 | |
(0.0736) | ||
ln_PCI | 0.872 *** | |
(0.137) | ||
L2.ln_PCI2 | −0.108 | |
(0.0668) | ||
Constant | −1.722 *** | |
(0.246) | ||
Observations | 768 | 768 |
Standard errors in parentheses. *** p < 0.01, ** p < 0.05, * p < 0.1. |
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Variable | Description/Transformation | Source |
---|---|---|
LN_CO2_PC | Per capita carbon dioxide emissions. Carbon dioxide emissions are those stemming from the burning of fossil fuels and the manufacture of cement. They include carbon dioxide produced during consumption of solid, liquid, and gas fuels and gas flaring. | World Development Indicators 2020 |
LN_PCI | Natural logarithm of GDP per capita. GDP per capita is gross domestic product divided by midyear population. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. Data are in constant 2010 U.S. dollars. | World Development Indicators 2020 |
LN_PCI2 | Natural logarithm of the squared value of per capita GDP. | World Development Indicators 2019 |
LN_Oil_Sh | Share of oil rents in total GDP. Oil rents are the difference between the value of crude oil production at world prices and total costs of production. | World Development Indicators 2019 |
LN_MVA | Natural logarithm of the Manufacturing Value Added. Manufacturing refers to industries belonging to ISIC divisions 15–37. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. | World Development Indicators 2020. |
Ln_Tertiarization | Natural logarithm of the share of services as a share of GDP. Services correspond to ISIC divisions 50–99 and they include value added in wholesale and retail trade (including hotels and restaurants), transport, and government, financial, professional, and personal services such as education, health care, and real estate services. | World Development Indicators 2020. |
LN_POWER_FOSSILS | Natural logarithm of the share of electricity production from fossil fuels in total electricity production. Sources of electricity refer to the inputs used to generate electricity. Oil refers to crude oil and petroleum products. Gas refers to natural gas but excludes natural gas liquids. Coal refers to all coal and brown coal, both primary (including hard coal and lignite-brown coal) and derived fuels (including patent fuel, coke oven coke, gas coke, coke oven gas, and blast furnace gas). Peat is also included in this category. | World Development Indicators 2020. |
Political Rights Index | The Political Rights index measures the degree of freedom in the electoral process, political pluralism and participation, and functioning of government. Numerically, Freedom House rates political rights on a scale of 1 to 7, with 1 representing the most free and 7 representing the least free. | The Freedom House 2020. |
Civil Liberties Index | The Civil Liberties Index is a composite index that measures the degree of civil liberties. Numerically, Freedom House rates civil liberties on a scale of 1 to 7, with 1 representing the most free and 7 representing the least free. | The Freedom House 2020. |
DEPENDENT VAR: CO2EMISSIONS PER CAPITA | Model 1 (PMG) | Model 2 (PMG) | Model 3 (MG) | Model 4 (PMG) | Model 5 (DFE) | Model 6 (DFE) | Model 7 (DFE) | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
VARIABLES | Long-Term | Short-Term | Long-Term | Short-Term | Long-Term | Short-Term | Long-Term | Short-Term | Long-Term | Short-Term | Long-Term | Short-Term | Short-Term | Long-Term |
Adjustment Term (ec) | −0.252 *** | −0.271 *** | −0.671 *** | −0.316 *** | −0.305 *** | −0.393 *** | -0.352 *** | |||||||
(0.0395) | (0.0402) | (0.0678) | (0.0572) | (0.0258) | (0.0327) | (0.0331) | ||||||||
D.lnOil_Sh | 0.0283 | 0.0144 | −0.0146 | 0.0270 | 0.003 | −0.00379 | −0.014 | |||||||
(0.0273) | (0.0193) | (0.0289) | (0.0197) | (0.0132) | (0.0153) | (0.0146) | ||||||||
lnOil_Sh | 0.126 *** | 0.0634 *** | 0.108 ** | 0.0287 *** | 0.0633 ** | 0.0537 ** | 0.102 *** | |||||||
(0.0164) | (0.0184) | (0.0523) | (0.00995) | (0.0277) | (0.0233) | (0.023) | ||||||||
L2.lnOil2 | 0.0437 *** | 0.00843 | ||||||||||||
(0.00901) | (0.0240) | |||||||||||||
L2D.lnOil2 | −0.0180 ** | −0.0115 | ||||||||||||
(0.00820) | (0.00890) | |||||||||||||
ln_PCI | 0.666 ** | 0.567 *** | 0.274 *** | |||||||||||
(0.266) | (0.0252) | (0.095) | ||||||||||||
D.ln_PCI | 0.340 * | 0.447 ** | 0.248 * | |||||||||||
(0.182) | (0.212) | (0.1430) | ||||||||||||
ln_Power_fossils | 0.265 *** | 0.090 * | 0.0692 * | 0.028 | ||||||||||
(0.0450) | (0.0498) | (0.0408) | (0.0401) | |||||||||||
D.ln_Power_fossils | −19.46 | 0.042 * | 0.0355 | 0.051 *** | ||||||||||
(18.85) | (0.0221) | (0.0230) | (0.204) | |||||||||||
ln_Tertiary | 0.312 *** | 0.125 * | −0.003 | |||||||||||
(0.0567) | (0.074) | (0.004) | ||||||||||||
D.ln_Tertiary | 0.193 * | 0.357 *** | 0.001 | |||||||||||
(0.1935) | (0.1479) | (0.0019) | ||||||||||||
lnMVA | 0.299 *** | 2.47 × 10−12 * | ||||||||||||
(0.0849) | (1.49 × 10−12) | |||||||||||||
D.lnMVA | −0.0466 | 1.28 × 10−12 | ||||||||||||
(0.0863) | (1.36 × 10−12) | |||||||||||||
Political Rights Index | −0.065 *** (0.0217) | |||||||||||||
D. Political Rights Index | 0.016 (0.117) | |||||||||||||
Constant | 0.191 ** | 0.178 ** | −3.941 ** | −1.665 *** | −2.199 *** | −3.844 *** | 0.588 *** | |||||||
(0.0965) | (0.0899) | (1.611) | (0.310) | (0.4719) | (0.663) | (0.3149) | ||||||||
Observations | 812 | 745 | 729 | 702 | - | - | - | |||||||
Hausman | H0: PMG/H1: DFE | H0: PMG/H1: DFE | H0: PMG/H1: MG | H0: PMG/H1: MG | H0: MG/H1: DFE | - | - | |||||||
0.26 | 0.10 | 1.67 | 0.13 | 0.00 | ||||||||||
Pesaran CD test statistics | 46.7 | 39.3 | 58.1 | 51.7 | 57.9 | 44.1 | 38.08 |
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Sadik-Zada, E.R.; Loewenstein, W. Drivers of CO2-Emissions in Fossil Fuel Abundant Settings: (Pooled) Mean Group and Nonparametric Panel Analyses. Energies 2020, 13, 3956. https://doi.org/10.3390/en13153956
Sadik-Zada ER, Loewenstein W. Drivers of CO2-Emissions in Fossil Fuel Abundant Settings: (Pooled) Mean Group and Nonparametric Panel Analyses. Energies. 2020; 13(15):3956. https://doi.org/10.3390/en13153956
Chicago/Turabian StyleSadik-Zada, Elkhan Richard, and Wilhelm Loewenstein. 2020. "Drivers of CO2-Emissions in Fossil Fuel Abundant Settings: (Pooled) Mean Group and Nonparametric Panel Analyses" Energies 13, no. 15: 3956. https://doi.org/10.3390/en13153956
APA StyleSadik-Zada, E. R., & Loewenstein, W. (2020). Drivers of CO2-Emissions in Fossil Fuel Abundant Settings: (Pooled) Mean Group and Nonparametric Panel Analyses. Energies, 13(15), 3956. https://doi.org/10.3390/en13153956