article · Energy Exploration & Exploitation
An econometric assessment examined the relationships between energy consumption, foreign direct investment, urbanisation, and carbon dioxide emissions across the Emerging Seven economies between 1991 and 2014. Using advanced estimation methods accounting for cross-sectional dependence and slope heterogeneity, the analysis established long-run cointegration across the studied factors. The findings demonstrate that increased energy consumption, urban expansion, economic growth, and population growth consistently drive up carbon dioxide emissions within these nations. In contrast, foreign direct investment acts to mitigate emissions. Causality testing identified mutual feedback relationships between emissions and population, economic output, foreign investment, and urbanisation, alongside a directional causality running from urbanisation to carbon release. These empirical results underpin policy suggestions aimed at curbing pollution and reducing overall emission rates across emerging economies.
Rapidly developing economies face the dual challenge of sustaining industrial expansion while limiting environmental damage. Understanding how energy usage, urban growth, and international investment interact with carbon emissions allows decision-makers to design targeted environmental policies. Demonstrating that foreign investment can reduce emissions while urbanisation expands them provides essential guidance for balancing national development goals with global climate commitments.
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This study investigated the link between energy consumption (EC), foreign direct investments (FDI), urbanization (URB) and CO 2 emissions in the emerging seven (E7) countries for the period 1991 to 2014. The exploration made a methodological contribution by employing modern econometric methods that are robust to the issues of cross-sectional dependence and slope heterogeneity, so as to obtain valid and reliable outcomes. From the results, the panel under consideration was heterogeneous and cross-sectionally correlated. Also, the series were first differenced stationary and cointegrated in the long-run. The DCCEMG and the DCCEPMG estimators were engaged to explore the long-run elastic effects of the covariates on the response variable, and from the results, EC and URB were key promoters of CO 2 effusions in the countries. However, FDI mitigated the emanation of CO 2 in the nations. Additionally, economic growth (GDP) and population growth (POP) escalated the emittance of CO 2 in the E7. On the D-H causality test outcomes, a feedback causality amid POP and CO 2 effusions; GDP and CO 2 excretions; FDI and CO 2 emissivities; and between URB and CO 2 secretions were discovered. Finally, a one-way causation from URB to the effluents of CO 2 was unfolded. Based on the verdicts, policy suggestions were proposed to help abate the rate of CO 2 exudations in the countries.
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DOI: 10.1177/01445987211023854
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