Nexus between Green Investment, Fiscal Policy, Environmental Tax, Energy Price, Natural Resources, and Clean Energy—A Step towards Sustainable Development by Fostering Clean Energy Inclusion
Abstract
:1. Introduction
2. Literature Survey
2.1. Green Investment and Clean Energy Consumption
2.2. Fiscal Policy and Renewable Energy Consumption
2.3. Environmental Tax and Clean Energy/Renewable Energy Consumption
2.4. Energy Price and Clean Energy/Renewable Energy Consumption
2.5. Natural Resources and Clean Energy/RE Consumption
3. Theoretical Development and Justification of the Study
4. Data and Methodology of the Study
4.1. Model Specification
4.2. Variable Definition
5. Estimation Strategy
5.1. Unit Roof Test
5.2. Bayer–Hancked and Makki Cointegration
5.3. Augmented Autoregressive Distributed Lag
5.4. Nonlinear Autoregressive Distributed Lagged
6. Estimation and Interpretation
Long-Run and Short-Run Coefficients: Linear and Nonlinear Estimation
7. Discussion
8. Conclusions and Policy Suggestions
Conclusions
- Governments must adopt and enforce policies that promote and facilitate the adoption of GI in various RE sources, including but not limited to hydropower, solar, and wind energy. Tax credits, grants, or subsidies can be utilized as incentives to promote RE technology investments by corporations and individuals.
- Governments must formulate budgetary strategies that prioritize environmental protection and sustainable development, which may entail reallocating funds towards environmentally favorable programs, reducing subsidies for fossil fuels, and augmenting funding for the research and advancement of RE technology.
- Environmental tariffs can potentially be highly effective in discouraging harmful activities and generating funds for initiatives focused on environmental conservation. It is recommended that governments impose taxes on carbon emissions, industrial pollution, and the exploitation of non-renewable resources to discourage their utilization and generate financial resources for investments in sustainable energy alternatives.
- Governments must strive to implement fair pricing structures for energy consumption, which duly account for the genuine costs of different energy production sources. When pricing models consider environmental externalities, consumers tend to be more inclined toward making decisions that promote the transition to cleaner forms of energy.
- It is imperative to prioritize the implementation of sustainable natural resource management. Governments must formulate comprehensive strategies aimed at effectively and sustainably managing natural resources, which can be achieved by implementing stringent regulations that prevent the excessive exploitation of vital resources, including forests and waterways, through the promotion of ethical mining practices, the safeguarding of wildlife habitats, and the enforcement of more stringent waste disposal regulations.
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Variables | Notation | Definition | Expected Result |
---|---|---|---|
Clean energy | REC | ||
Fiscal policy | HP | Fiscal policy is measured using taxation revenue shares of GDP. | + |
Environmental tax | ET | Environment protection tax | + |
Oil price | OP | Oil price | − |
Natural resources | NRR | Natural resource rent | + |
Green investment | GI | Measured by investment in the environmental protection products by resident units | + |
Variables | Perron and Vogelsang | ADF Test | |||
---|---|---|---|---|---|
Level | Test Statistics | Significance | D-SB | Test Statistics | Significance |
At level | |||||
REC | −1.8069 | 2017 | −1.0568 | ||
GI | −2.6665 | 2005 | −2.0403 | ||
FP | −1.6413 | 2011 | −0.4523 | ||
ET | −0.9761 | 2009 | −1.0711 | ||
OP | −1.4142 | 2010 | −2.1594 | ||
NRR | −1.0498 | 2011 | −2.8125 | ||
First difference | |||||
REC | −6.9541 | *** | 2000 | −4.4116 | *** |
GI | −8.6554 | *** | 2005 | −6.5487 | ** |
FP | −10.3722 | *** | 2003 | −7.3499 | *** |
ET | −9.4468 | *** | 2000 | −5.3761 | *** |
OP | −6.729 | *** | 1994 | −8.9776 | *** |
NRR | −8.0452 | *** | 2004 | −4.4941 | *** |
1 | 2 | 3 | 4 | 5 | |
---|---|---|---|---|---|
Panel–A: Bayer–Hancked cointegration | |||||
EG-JOH | 14.891 | 10.965 | 11.339 | 10.951 | 10.632 |
Critical value 5% | 11.229 | 10.895 | 10.637 | 10.576 | 10.419 |
EG-JOH-BO-BDM | 31.369 | 24.577 | 22.167 | 20.969 | 20.886 |
Critical value 5% | 21.931 | 21.106 | 20.486 | 20.143 | 19.888 |
Panel–B: Maki cointegration | |||||
Number of Breaks Points | Test Statistics | (Critical Values) | Break Points | ||
Tb < 5 | |||||
0 | −7.2462 | −6.306 | 2015, 2020, 1994, 2004, 2018 | ||
1 | −8.4724 | −6.494 | 2021, 2000, 1999, 2005, 1996 | ||
2 | −8.0196 | −8.869 | 2004, 2008, 2018, 2013, 1998 | ||
3 | −7.457 | −9.482 | 2003, 2010, 2006, 2011, 2005 |
Long-Run Cointegration | Foverall | tDV | FIDV |
---|---|---|---|
ARDL | 10.615 *** | −5.704 *** | 8.011 *** |
NARDL | 7.145 *** | −5.949 *** | 10.006 *** |
Symmetric Estimation | Asymmetric Estimation | ||||||
---|---|---|---|---|---|---|---|
Coefficient | t-Stat | Std. Error | Coefficient | t-Stat | Std. Error | ||
Panel–A: Long-run coefficients | |||||||
GI | 0.1473 | 0.0039 | 37.7692 | GI+ | 0.1924 | 0.0037 | 52.021 |
FP | 0.1096 | 0.0101 | 10.8514 | GI− | 0.1455 | 0.0057 | 25.5263 |
ET | 0.1775 | 0.0119 | 14.9159 | FP+ | 0.1624 | 0.0031 | 52.387 |
OP | −0.0637 | 0.0068 | −9.3676 | FP− | 0.1315 | 0.0082 | 16.0365 |
NRR | −0.1051 | 0.0074 | −14.2027 | ET+ | 0.1739 | 0.0078 | 22.2948 |
ET− | 0.1234 | 0.0042 | 29.3809 | ||||
NRR | −0.1361 | 0.0075 | −18.1466 | ||||
OP | 0.0964 | 0.0105 | 9.1809 | ||||
C | 0.103468 | 0.005717 | 18.09834 | C | 0.1176 | 0.0036 | 32.6666 |
5.281 | |||||||
8.134 | |||||||
5.336 | |||||||
short-run | |||||||
GI | 0.0338 | 0.0027 | 12.5185 | GI+ | 0.0702 | 0.0042 | 16.7142 |
FP | 0.0715 | 0.0075 | 9.5333 | GI− | 0.0244 | 0.008 | 3.05 |
ET | 0.0681 | 0.0094 | 7.2446 | FP+ | 0.0361 | 0.0094 | 3.8404 |
OP | 0.0299 | 0.0099 | 3.0202 | FP− | 0.0472 | 0.0063 | 7.492 |
NNR | 0.0085 | 0.003 | 2.8333 | ET+ | 0.0567 | 0.0086 | 6.593 |
ET− | 0.0652 | 0.0099 | 6.5858 | ||||
NRR | 0.023 | 0.0041 | 5.6097 | ||||
OP | 0.0334 | 0.0047 | 7.1063 | ||||
ECT | −0.7988 | 0.1985 | −4.02418136 | −0.800539 | 0.0886 | −9.0354 | |
11.371 | |||||||
5.118 | |||||||
3.159 |
p-Value | Results | |
---|---|---|
Panel–A: for symmetric framework | ||
Breusch–Godfrey LM test | 0.682 | Absence of serial correlation |
Breusch–Pagan–Godfrey test | 0.637 | No issue dealing with heteroskadacity |
ARCH Test | 0.859 | No issue dealing with heteroskadacity |
Ramsey RESET Test | 0.684 | Model construction with efficiency |
Jarque–Bera test | 0.516 | Residuals are normally distributed |
Panel–B: For asymmetric framework | ||
Breusch–Godfrey LM test | 0.508 | Absence of serial correlation |
Breusch–Pagan–Godfrey test | 0.58 | No issue dealing with heteroskadacity |
ARCH Test | 0.883 | No issue dealing with heteroskadacity |
Ramsey RESET Test | 0.54 | Model construction with efficiency |
Jarque–Bera test | 0.626 | Residuals are normally distributed |
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Yan, H.; Qamruzzaman, M.; Kor, S. Nexus between Green Investment, Fiscal Policy, Environmental Tax, Energy Price, Natural Resources, and Clean Energy—A Step towards Sustainable Development by Fostering Clean Energy Inclusion. Sustainability 2023, 15, 13591. https://doi.org/10.3390/su151813591
Yan H, Qamruzzaman M, Kor S. Nexus between Green Investment, Fiscal Policy, Environmental Tax, Energy Price, Natural Resources, and Clean Energy—A Step towards Sustainable Development by Fostering Clean Energy Inclusion. Sustainability. 2023; 15(18):13591. https://doi.org/10.3390/su151813591
Chicago/Turabian StyleYan, Han, Md. Qamruzzaman, and Sylvia Kor. 2023. "Nexus between Green Investment, Fiscal Policy, Environmental Tax, Energy Price, Natural Resources, and Clean Energy—A Step towards Sustainable Development by Fostering Clean Energy Inclusion" Sustainability 15, no. 18: 13591. https://doi.org/10.3390/su151813591
APA StyleYan, H., Qamruzzaman, M., & Kor, S. (2023). Nexus between Green Investment, Fiscal Policy, Environmental Tax, Energy Price, Natural Resources, and Clean Energy—A Step towards Sustainable Development by Fostering Clean Energy Inclusion. Sustainability, 15(18), 13591. https://doi.org/10.3390/su151813591