Industrial growth and CO 2 emissions in Vietnam: the key role of financial development and fossil fuel consumption
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RESEARCH ARTICLE
Industrial growth and CO2 emissions in Vietnam: the key role of financial development and fossil fuel consumption Kishwar Ali 1
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Satar Bakhsh 2
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Saif Ullah 3
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Atta Ullah 4
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Sami Ullah 5
Received: 5 May 2020 / Accepted: 25 September 2020 # Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract The increase in greenhouse gas emission has a major global issue, catching the attention of the researcher and policymakers around the world. The combustion of fossil fuel is the main cause of the rising greenhouse gas emission particularly in developing countries including Vietnam. Meanwhile, the purpose of the study is to evaluate the linkage between fossil fuel consumption, financial development, industrial progression, and CO2 emission over the period from 1970 to 2019, particularly in Vietnam. The study applied the ARDL econometric technique and Bayer-Hanck cointegration approach with structural break to confirm long run relationship and the EKC hypothesis between industrial growth and CO2 emission, in Vietnam, which assume the U-shaped link between CO2 emission and industrial growth in Vietnam. Which further confirmed by Lind and Mehlum U test in addition, the Granger causality exists between fossil fuel consumption and CO2 emission in both short run and long run. The causal relationship is unidirectional in the short run running from fossil fuel consumption and carbon dioxide emission; therefore, the study proposed to adopt low-carbon emission technology. Keywords Industrial growth . Emission of CO2 . Financial development . Fossil fuel consumption
Introduction Global warming and climate changes are the increasing global issues, and over the period, the intensity of the issue has gained significant attention as many countries from all over the world have started taking notice of the problem (Hughes et al. 2017). It was studied about the intensity of global warming that modernization of the world is more focused on the economic growth which is being derived by the industrial growth mainly (Lamba et al. 2019). Industrial manufacturing
processes include machines that need high power to run, and most of the countries have been using fossil fuels for this process. Either the industries are relying on natural gases or petroleum, or both the elements emit CO2 to the environment, which is a type of greenhouse gas (Mgbemene et al. 2016). Paris Accord in 2015 has highlighted the issue of greenhouse gases and global warming and defined that the increasing temperature of the world would result in the increased level of the sea which will be a natural disaster for most of the countries geographically below the sea. Furthermore, it was
Responsible Editor: Nicholas Apergis * Atta Ullah [email protected]; [email protected]
1
School of Finance, Zhongnan University of Economics and Law, Wuhan 430073, China
2
School of International Trade and Economics, University of international Business and Economics, UIBE, Beijing, China
3
Management Sciences, SZABIST Karachi, Karachi,
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