On the nexus among carbon dioxide emissions, energy consumption and economic growth in G-7 countries: new insights from the historical decomposition approach


Balcilar M., Ozdemir Z. A. , Tuncsiper B., Ozdemir H., Shahbaz M.

ENVIRONMENT DEVELOPMENT AND SUSTAINABILITY, vol.22, no.8, pp.8097-8134, 2020 (SCI-Expanded) identifier identifier

  • Publication Type: Article / Article
  • Volume: 22 Issue: 8
  • Publication Date: 2020
  • Doi Number: 10.1007/s10668-019-00563-6
  • Journal Name: ENVIRONMENT DEVELOPMENT AND SUSTAINABILITY
  • Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Scopus, International Bibliography of Social Sciences, PASCAL, ABI/INFORM, Agricultural & Environmental Science Database, Aquatic Science & Fisheries Abstracts (ASFA), BIOSIS, Business Source Elite, Business Source Premier, CAB Abstracts, Geobase, Greenfile, Index Islamicus, Pollution Abstracts, Veterinary Science Database, Civil Engineering Abstracts
  • Page Numbers: pp.8097-8134
  • Keywords: CO(2)emissions, Energy consumption, Economic growth, Historical decomposition, ENVIRONMENTAL KUZNETS CURVE, CO2 EMISSIONS, RENEWABLE ENERGY, FINANCIAL DEVELOPMENT, PANEL COINTEGRATION, CAUSAL NEXUS, GRANGER CAUSALITY, HYPOTHESIS, OIL, URBANIZATION
  • Gazi University Affiliated: Yes

Abstract

This paper investigates the relationship between carbon dioxide emissions, energy consumption and economic growth in the G-7 countries from a historical perspective. To this end, taking time-varying interaction and business cycle into account, we use the historical decomposition method for the first time in the literature. Our results provide evidence that Canada, Italy, Japan and partly the USA need to sacrifice economic growth if they aim to reduce CO(2)emissions by decreasing fossil-based energy use. This situation is not valid since the early 1990s for France, throughout the analysis period for Germany and a few exceptions in all periods for the UK. Furthermore, empirical results provide evidence contrary to the EKC hypothesis for Canada, Germany, Japan, the UK and the USA. We found BC-shaped and N-shaped curves for France and Italy, respectively. Although the EKC hypothesis is not valid for Germany and the UK, economic growth has no damaging effect on environmental quality. Also, this effect seems to be cyclical for the USA.