The influence of trade openness on environmental pollution in EU-18 countries
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RESEARCH ARTICLE
The influence of trade openness on environmental pollution in EU-18 countries Andrews Kwamena Tachie 1 Isaac Adjei Mensah 1
&
Long Xingle 1 & Lamini Dauda 1 & Claudia Nyarko Mensah 1 & Florence Appiah-Twum 1 &
Received: 21 January 2020 / Accepted: 12 June 2020 # Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract Trade openness is one of the main channels of globalization and technological transfers. In environmental economic literature, the implications of trade openness remain controversial and still could be potential drivers of carbon dioxide emissions. This study therefore explores the effect of trade openness in developed countries using EU-18 economies. We employed an econometric approach that accounts for cross-section dependence among study variables. The panel CIPS and CADF unit root show that the variables are stationary and the long-run relationship was confirmed in Westerlund cointegration tests. The mean group (MG) and augmented mean group (AMG) results show that trade openness increases CO2-emissions in EU-18. Again, energy consumption and urbanization escalate emissions. The study confirmed the environmental Kuznets curve. Finally, pollution halo and pollution haven hypothesis were confirmed at both estimation methods. The Dumetriscu-Hurlin Granger causality test results confirmed bidirectional causality between trade openness and energy consumption and between trade openness and economic growth. Again, unidirectional Granger causality is running from trade openness and CO2 emissions. Policy recommendations are further proposed. Keywords Trade openness . Economic growth . Energy consumption . CO2 emission
Introduction It is widely known that in order to sustain life, greenhouse gas (GHG) is required so as to help in leveling the earth’s Editorial Responsibility: Nicholas Apergis * Andrews Kwamena Tachie [email protected] * Long Xingle [email protected] Lamini Dauda [email protected] Claudia Nyarko Mensah [email protected] Florence Appiah-Twum [email protected] Isaac Adjei Mensah [email protected] 1
School of Management, Jiangsu University, Zhenjiang 212013, China
temperature. Conversely, an increasing growth in the amount of GHG emissions as a result of human deeds like consuming high fossil fuel as well as the pursuit of economic growth ingests global warming resulting in the changes in the climatic systems. Ostensibly, this can be considered as one of the major issues faced by humanity currently (Mikayilov et al. 2018). As a result of this, carbon dioxide (CO2) is considered as the key driver of environmental pollution (Tiba and Omri 2017). Though the reduction requirements of CO2 emissions referred to advanced countries, for the reason being that they are considered as the main causes to global CO2 emissions, there have been several calls on emerging economies to take an active part in the reduction of the global emissions (Winkler et al. 2002). Trade openness impacts the environment in three main diverse ways: the scale
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