IDEAS home Printed from https://ideas.repec.org/a/bla/rdevec/v28y2024i3p827-850.html
   My bibliography  Save this article

New insight into decoupling carbon emissions from economic growth: Do financialization, human capital, and energy security risk matter?

Author

Listed:
  • Paul Terhemba Iorember
  • Solomon Gbaka
  • Abdurrahman Işık
  • Chinazaekpere Nwani
  • Jaffar Abbas

Abstract

Against the backdrop of persistent climate change and deteriorating environmental pressure, this study integrates financialization, human capital, and energy security risks to provide new insight into decoupling carbon emissions from economic growth. The study employs annual panel data on the BRICS (Brazil, Russia, India, China, and South Africa) countries for the period of 1990–2019. The research employs the C‐S ARDL approach and the Tapio decoupling index to assess the decoupling status of the BRICS countries. In addition, this study applies the recently developed Juodis, Karavias, and Sarafidis Granger noncausality test for robustness. The findings offer compelling evidence of an inverted U‐shaped curve, aligning with the environmental Kuznets curve hypothesis. Consequently, the results confirm the decoupling of carbon emissions in the BRICS nations. Furthermore, the Tapio decoupling elasticity index confirms different carbon decoupling statuses among the BRICS. The results show expansive negative decoupling for Brazil, weak decoupling for India and China, and strong decoupling for Russia and South Africa. In terms of policy, achieving strong decoupling status in the BRICS requires that financial institutions' lending and investing strategies align with environmental objectives. In addition, human capital development policies such as increased spending on education should be vigorously pursued to empower people to lead sustainable development projects.

Suggested Citation

  • Paul Terhemba Iorember & Solomon Gbaka & Abdurrahman Işık & Chinazaekpere Nwani & Jaffar Abbas, 2024. "New insight into decoupling carbon emissions from economic growth: Do financialization, human capital, and energy security risk matter?," Review of Development Economics, Wiley Blackwell, vol. 28(3), pages 827-850, August.
    • Handle: RePEc:bla:rdevec:v:28:y:2024:i:3:p:827-850
    DOI: 10.1111/rode.13077
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/rode.13077
    Download Restriction: no
    File URL: https://libkey.io/10.1111/rode.13077?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ojonugwa Usman & Paul Terhemba Iorember & Ilhan Ozturk & Festus Victor Bekun, 2022. "Examining the Interaction Effect of Control of Corruption and Income Level on Environmental Quality in Africa," Sustainability, MDPI, vol. 14(18), pages 1-15, September.
    2. Sovacool, Benjamin K. & Mukherjee, Ishani, 2011. "Conceptualizing and measuring energy security: A synthesized approach," Energy, Elsevier, vol. 36(8), pages 5343-5355.
    3. Qing Guo & Wenlan You, 2023. "Decoupling analysis of economic growth, energy consumption and CO2 emissions in the industrial sector of Guangdong Province," International Journal of Low-Carbon Technologies, Oxford University Press, vol. 18, pages 494-506.
    4. Artūras Juodis & Yiannis Karavias & Vasilis Sarafidis, 2021. "A homogeneous approach to testing for Granger non-causality in heterogeneous panels," Empirical Economics, Springer, vol. 60(1), pages 93-112, January.
    5. Khan, Zeeshan & Ali, Shahid & Dong, Kangyin & Li, Rita Yi Man, 2021. "How does fiscal decentralization affect CO2 emissions? The roles of institutions and human capital," Energy Economics, Elsevier, vol. 94(C).
    6. Westerlund, Joakim & Edgerton, David L., 2007. "A panel bootstrap cointegration test," Economics Letters, Elsevier, vol. 97(3), pages 185-190, December.
    7. Peterson K. Ozili & Paul Terhemba Iorember, 2024. "Financial stability and sustainable development," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 2620-2646, July.
    8. Lin, Boqiang & Raza, Muhammad Yousaf, 2020. "Analysis of energy security indicators and CO2 emissions. A case from a developing economy," Energy, Elsevier, vol. 200(C).
    9. York, Richard & Rosa, Eugene A. & Dietz, Thomas, 2003. "STIRPAT, IPAT and ImPACT: analytic tools for unpacking the driving forces of environmental impacts," Ecological Economics, Elsevier, vol. 46(3), pages 351-365, October.
    10. Shah, Syed Ale Raza & Zhang, Qianxiao & Abbas, Jaffar & Tang, Hui & Al-Sulaiti, Khalid Ibrahim, 2023. "Waste management, quality of life and natural resources utilization matter for renewable electricity generation: The main and moderate role of environmental policy," Utilities Policy, Elsevier, vol. 82(C).
    11. Månsson, André & Johansson, Bengt & Nilsson, Lars J., 2014. "Assessing energy security: An overview of commonly used methodologies," Energy, Elsevier, vol. 73(C), pages 1-14.
    12. Gasser, Patrick, 2020. "A review on energy security indices to compare country performances," Energy Policy, Elsevier, vol. 139(C).
    13. Hsu, Ching-Chi & Ngo, Quang-Thanh & Chien, FengSheng & Li, Li & Mohsin, Muhammad, 2021. "Evaluating green innovation and performance of financial development: mediating concerns of environmental regulation," MPRA Paper 109671, University Library of Munich, Germany.
    14. Mehmet Balcilar & Ojonugwa Usman & George N. Ike, 2023. "Investing green for sustainable development without ditching economic growth," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(2), pages 728-743, April.
    15. Chudik, Alexander & Pesaran, M. Hashem, 2015. "Common correlated effects estimation of heterogeneous dynamic panel data models with weakly exogenous regressors," Journal of Econometrics, Elsevier, vol. 188(2), pages 393-420.
    16. Paul Terhemba Iorember & Solomon Gbaka & Gylych Jelilov & Nargiza Alymkulova & Ojonugwa Usman, 2022. "Impact of international trade, energy consumption and income on environmental degradation in Africa's OPEC member countries," African Development Review, African Development Bank, vol. 34(2), pages 175-187, June.
    17. Acheampong, Alex O., 2019. "Modelling for insight: Does financial development improve environmental quality?," Energy Economics, Elsevier, vol. 83(C), pages 156-179.
    18. Daniel Mara & Silviu Nate & Andriy Stavytskyy & Ganna Kharlamova, 2022. "The Place of Energy Security in the National Security Framework: An Assessment Approach," Energies, MDPI, vol. 15(2), pages 1-29, January.
    19. Hazwan Haini, 2021. "Examining the impact of ICT, human capital and carbon emissions: Evidence from the ASEAN economies," International Economics, CEPII research center, issue 166, pages 116-125.
    20. Shahbaz, muhammad & Solarin, Sakiru Adebola & Sbia, Rashid & Bibi, Sadia, 2015. "Does Energy Intensity Contribute to CO2 Emissions? A Trivariate Analysis in Selected African Countries," MPRA Paper 64335, University Library of Munich, Germany, revised 19 Mar 2015.
    21. Leonidas Paroussos & Kostas Fragkiadakis & Panagiotis Fragkos, 2020. "Macro-economic analysis of green growth policies: the role of finance and technical progress in Italian green growth," Climatic Change, Springer, vol. 160(4), pages 591-608, June.
    22. Min Shang & Ji Luo, 2021. "The Tapio Decoupling Principle and Key Strategies for Changing Factors of Chinese Urban Carbon Footprint Based on Cloud Computing," IJERPH, MDPI, vol. 18(4), pages 1-17, February.
    23. Elvis D. Achuo & Clovis Wendji Miamo & Clémence Zite Kouhomou, 2024. "Resource rents and environmental pollution in developing countries: Does the quality of institutions matter?," Review of Development Economics, Wiley Blackwell, vol. 28(1), pages 360-387, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paul Terhemba Iorember & Nora Yusma Mohamed Yusoff, 2023. "Income–environmental nexus in Africa: The integrating role of renewable energy transition and governance quality," African Development Review, African Development Bank, vol. 35(4), pages 376-389, December.
    2. Huang, Chaoqun & Liu, Weibai & Iqbal, Wasim & Shah, Syed Ale Raza, 2024. "Does digital governance matter for environmental sustainability? The key challenges and opportunities under the prism of natural resource management," Resources Policy, Elsevier, vol. 91(C).
    3. Aurelia Rybak & Aleksandra Rybak & Jarosław Joostberens, 2023. "The Impact of Removing Coal from Poland’s Energy Mix on Selected Aspects of the Country’s Energy Security," Sustainability, MDPI, vol. 15(4), pages 1-13, February.
    4. Talan, Amogh & Rao, Amar & Sharma, Gagan Deep & Apostu, Simona-Andreea & Abbas, Shujaat, 2023. "Transition towards clean energy consumption in G7: Can financial sector, ICT and democracy help?," Resources Policy, Elsevier, vol. 82(C).
    5. Zhu, Bo & Deng, Yuanyue & Hu, Xin, 2023. "Global energy security: Do internal and external risk spillovers matter? A multilayer network method," Energy Economics, Elsevier, vol. 126(C).
    6. Shao, Shuai & Razzaq, Asif, 2022. "Does composite fiscal decentralization reduce trade-adjusted resource consumption through institutional governance, human capital, and infrastructure development?," Resources Policy, Elsevier, vol. 79(C).
    7. Mehmet Demiral & Özkan Haykır & Emine Dilara Aktekin-Gök, 2024. "Environmental pollution effects of economic, financial, and industrial development in OPEC: comparative evidence from the environmental Kuznets curve perspective," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(10), pages 24905-24936, October.
    8. Skare, Marinko & Ozturk, Ilhan & Porada-Rochoń, Małgorzata & Stjepanovic, Sasa, 2024. "Energy as the new frontier: Dynamic panel data analysis revealing energy's transformative role in economic growth and technological progress," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    9. Bilgehan Tekin, 2024. "The catalyzing role of financial inclusion in decoding environmental challenges and fostering a sustainable future in BRICS‐T," Economics and Politics, Wiley Blackwell, vol. 36(3), pages 1572-1603, November.
    10. Herie Park & Sungwoo Bae, 2021. "Quantitative Assessment of Energy Supply Security: Korea Case Study," Sustainability, MDPI, vol. 13(4), pages 1-15, February.
    11. Iztok Podbregar & Goran Šimić & Mirjana Radovanović & Sanja Filipović & Damjan Maletič & Polona Šprajc, 2020. "The International Energy Security Risk Index in Sustainable Energy and Economy Transition Decision Making—A Reliability Analysis," Energies, MDPI, vol. 13(14), pages 1-16, July.
    12. Muhammad Awais Baloch & Danish, 2022. "CO2 emissions in BRICS countries: what role can environmental regulation and financial development play?," Climatic Change, Springer, vol. 172(1), pages 1-14, May.
    13. Feng Wang & Tayyaba Rani & Asif Razzaq, 2023. "Environmental impact of fiscal decentralization, green technology innovation and institution’s efficiency in developed countries using advance panel modelling," Energy & Environment, , vol. 34(4), pages 1006-1030, June.
    14. Yuyan Jiang & Xueli Liu, 2023. "A Bibliometric Analysis and Disruptive Innovation Evaluation for the Field of Energy Security," Sustainability, MDPI, vol. 15(2), pages 1-29, January.
    15. Ioannis Kostakis & Sarantis Lolos, 2024. "Uncovering the impact of cultural heritage on economic growth: empirical evidence from Greek regions, 2000–2019," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 73(3), pages 1209-1239, October.
    16. Jacek Strojny & Anna Krakowiak-Bal & Jarosław Knaga & Piotr Kacorzyk, 2023. "Energy Security: A Conceptual Overview," Energies, MDPI, vol. 16(13), pages 1-35, June.
    17. Zhu, Ruikun & Xu, Qi & Xiqiang, Xia & Sibt-e-Ali, Muhammad & Waqas, Muhammad & Ullah, Irfan & Anwar, Ahsan, 2024. "Role of resources rent, research and development, and information and communication technologies on CO2 emissions in BRICS economies," Resources Policy, Elsevier, vol. 93(C).
    18. Arusha Cooray & Ibrahim Özmen, 2024. "Institutions and carbon emissions: an investigation employing STIRPAT and machine learning methods," Empirical Economics, Springer, vol. 67(3), pages 1015-1044, September.
    19. Zhang, Cuifang & Xiang, Xiandeng, 2023. "Fiscal decentralization, environmental policy stringency, and resource sustainability: Panacea or Pandora's box in high resource consuming countries," Resources Policy, Elsevier, vol. 83(C).
    20. Zhongwei, Huang & Liu, Yishu, 2022. "The role of eco-innovations, trade openness, and human capital in sustainable renewable energy consumption: Evidence using CS-ARDL approach," Renewable Energy, Elsevier, vol. 201(P1), pages 131-140.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:rdevec:v:28:y:2024:i:3:p:827-850. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.
    pFad - Phonifier reborn

    Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

    Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


    Alternative Proxies:

    Alternative Proxy

    pFad Proxy

    pFad v3 Proxy

    pFad v4 Proxy