Fossil Fuel Consumption, CO2 Emissions and Growth in High-Income Countries and Low-Income Countries
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Chukwuemeka Amaefule 1 * , Ijeoma Emele Kalu 1 2 , Sylvester Udeorah 1 , Lawrence Oghenemaro Ebelebe 3
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1 Department of Economics, Faculty of Social Sciences, University of Port Harcourt, Choba, Rivers State, NIGERIA2 University of Port Harcourt3 International Trade and Development, University of Port Harcourt, Choba, Rivers State, NIGERIA* Corresponding Author

Abstract

This paper investigates the pairwise causality and co-integration that links fossil fuel consumption (FFC), carbon dioxide (CO2) emissions, and real gross domestic product (RGDP) between low-income countries (LIC) and high-income countries (HIC). This comparative analysis is anchored on Lv et al. (2019). Lv et al. (2019) enable the analytical framework model utilized to investigate the causality between FFC and CO2, CO2 and RGDP, and FFC and RGDP in HIC and LIC. Data were obtained from world development indicator between 1960 and 2019. The results obtained are, as follows: There exists a unidirectional causality, thus the RGDP granger causes CO2 in HIC, and no causality between RGDP and CO2 in LIC. Also, the study found no causality between FFC and RGDP, and FFC and CO2 in HIC and LIC. The mixed inter-regional causality result showed that there exists bi-directional causality between RGDP and CO2 for HIC and LIC. This implies that RGDP in LIC granger causes CO2 in HIC, and CO2 in HIC granger causes RGDP in LIC. Hence, the presence of a regional super-wicked problem. Also, CO2 in HIC granger causes FFC in LIC. The result suggests that countries should seamlessly adopt proportionate mitigation and adaptation policies to reduce the pollution transmission between economies. The non-existence of pairwise co-integration between FFC, CO2, and RGDP in HIC and LIC connotes that the CO2 reduction policy should be a short-term public policy strategy with conscious and deliberate targeting to avoid long-run growth reversal. Therefore, this paper concludes that reducing FFC may not necessarily lead to a decline in growth vice versa. Thus, to achieve a low carbon economy and a high growth regime, the global community should adopt a techno-economic paradigm model that would accelerate growth within a low-carbon economy regime to realize the 45% carbon reduction target by 2030 and the 2050 net-zero emission target.

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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Article Type: Research Article

EUR J SUSTAIN DEV RES, Volume 6, Issue 3, 2022, Article No: em0190

https://doi.org/10.21601/ejosdr/12084

Publication date: 12 May 2022

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Article Downloads: 654

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