Trade and the Environment: Do Environmental Provisions in Trade Agreements Enhance Environmental Quality in Developed Countries during the Period 2003-2020?

Document Type : Original Article

Authors

1 Business School-Arab Academy for Science and Technology-Alexandria-Egypt

2 Marketing and International Business Department, College of Management and Technology, Arab Academy for Science, Technology and Maritime Transport (AASTMT), Alexandria, Egypt.

Abstract

This study aims to examine the long-run causal relationship between energy intensity, renewable electricity generation, environmental-related technologies, environmental-related taxes, real GDP per capita, regional trade agreements, and environmental quality measured by CO2 emissions in 17 countries classified as the most reliant on renewable energy and in the meanwhile among the ones with very high human development index. After testing cross-sectional dependence in panel data and slope homogeneity, panel unit root tests were conducted to investigate the variable's stationarity. The study applies the pooled FMOLS and DOLS estimation techniques to examine the long-term link between variables, in addition, the Dumitrescu-Hurlin test is employed to test the causality relationship. The results showed that using FMOLS and DOLS, both economic growth and energy intensity significantly positively affect the CO2 emissions in the selected countries. Moreover, renewable electricity generation significantly negatively affects CO2 emissions based on both techniques employed. While FMOLS revealed a significant negative influence of both environmental technologies and joining RTAs on CO2 emissions, DOLS failed to prove any influence of these two variables on CO2 emissions. No significant impact of environmental taxes on carbon emissions has been found

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