Exploring the nexus between tax revenues, government expenditures, and climate change: empirical evidence from Belt and Road Initiative countries

Peng Yuelan1, Muhammad Waqas Akbar2, Zeenat Zia2, Muhammad Imran Arshad3
1Shanxi Institute of Economics Management, Taiyuan, China
2Shanxi University of Finance and Economics, Taiyuan, China
3Virtual University, Lahore, Pakistan

Tóm tắt

The greenhouse gas (GHG) emissions generated by human activities are the leading cause of rapid climate change. High energy consumption projects in the BRI initiative have more impact on the environment. Therefore, fiscal policy instruments are essentials to combat climate change. This paper explores the impact of fiscal policy instruments, FDI, energy use, and GDP on climate change in Belt and Road Initiative (BRI) countries. The study utilizes fully modified ordinary least squares (FMOLS), dynamic ordinary least squares (DOLS) long-run econometric models to estimate the long-run results in the full panel and individual countries. Furthermore, Dumitrescu and Hurlin’s (2012) causality test has been utilized to observe the short-run causalities among variables. The empirical findings confirmed that fiscal policy instruments expressively help to mitigate climate change, while foreign direct investment significantly intensifies the climate change in BRI. The short-run heterogeneous causality endorses bidirectional causality between fiscal policy instruments and climate change. It suggests that policy-makers should consider fiscal policy instruments to mitigate climate change in the BRI countries.

Từ khóa


Tài liệu tham khảo

Abdouli M, Hammami S (2017) Economic growth, environment, FDI inflows, and financial development in middle east countries: fresh evidence from simultaneous equation models. J Knowl Econ 11(2):479–511. https://doi.org/10.1007/s13132-018-0546-9

Ahmed Z, Wang Z, Mahmood F, Hafeez M, Ali N (2019) Does globalization increase the ecological footprint? Empirical evidence from Malaysia. Environ Sci Pollut Res. 2019;26(18):18565–18582. https://doi.org/10.1007/s11356-019-05224-9

Akbar MW, Yuelan P, Maqbool A, Zia Z, Saeed M (2021a) The nexus of sectoral-based CO2 emissions and fiscal policy instruments in the light of Belt and Road Initiative. Environmental Science and Pollution Research, Ipcc. https://doi.org/10.1007/s11356-021-13040-3

Akbar MW, Yuelan P, Zia Z, Arshad MI (2021) Role of fiscal policy in energy efficiency and CO2 emission nexus: An investigation of belt and road region. Journal of Public Affairs. https://doi.org/10.1002/pa.2603

Aung TS, Saboori B, Rasoulinezhad E (2017) Economic growth and environmental pollution in Myanmar: an analysis of the environmental Kuznets curve. Environ Sci Pollut Res 24(25):20487–20501

Baloch A, Shah SZ, Noor ZM (2018) The nexus between income inequality, economic growth and climate change in Pakistan. Geo-Journal 83:207–222. https://doi.org/10.1007/s10708-016-9766-3

Bekun FV, Alola AA, Sarkodie SA (2019) Toward a sustainable environment: nexus between CO2 emissions, resource rent, renewable and nonrenewable energy in 16-EU countries. Sci Total Environ 657:1023–1029. https://doi.org/10.1016/j.scitotenv.2018.12.104

Breitung J (2000) The local power of some unit root tests for panel data. Adv Econ 15:161–177. https://doi.org/10.1016/S0731-9053(00)15006-6

Cetin M and Ecevit E (2017) The impact of financial development on carbon emissions under the structural breaks: empirical evidence from Turkish economy. Int J Econ Perspect 11(1):64–78 Fung Business Intelligence Centre (2016) The Belt and Road Initiative: 65 Countries and Beyond Available https://www.fbicgroup.com/?q=reports&page=4.

Chan YT (2020) Are macroeconomic policies better in curbing air pollution than environmental policies? A DSGE approach with carbon-dependent fiscal and monetary policies. Energy Policy 141(March):111454. https://doi.org/10.1016/j.enpol.2020.111454

Dickey DA, Fuller WA (1979) Distribution of the estimators for autoregressive time series with a unit root. J Am Stat Assoc 74:427–431

Dumitrescu EI, Hurlin C (2012) Testing for Granger non-causality in heterogeneous panels. Econ Model 29(4):1450–1460. https://doi.org/10.1016/j.econmod.2012.02.014

Environmental protection agency: https://www.epa.gov/climate-research

Feng GF, Dong M, Wen J, Chang CP (2018) The impacts of environmental governance on political turnover of municipal party secretary in China. Environ Sci Pollut Res. https://doi.org/10.1007/s11356-018-2499-8

Hafeez M, Chunhui Y, Strohmaier D, Ahmed M, Jie L (2018) Does finance affect climate change: evidence from One Belt and One Road Initiative region? Environ Sci Pollut Res 25:1–14

Hafeez M, Yuan C, Khelfaoui I, SultanMusaad A, O, Waqas Akbar M, Jie L, (2019a) Evaluating the energy consumption inequalities in the one belt and one road region: implications for the environment. Energies 12(7):1358

Hafeez M, Yuan C, Shahzad K, Aziz B, Iqbal K, Raza S (2019) An empirical evaluation of financial development-carbon footprint nexus in one belt and road region. Environ Sci Pollut Res 26:1–11

Hafeez M, Yuan C, Yuan Q, Zhuo Z, Stromaier D (2019) A global perspective of climate changes: economy and finance. Environ Sci Pollut Res 26:1–18

Halkos GE, Paizanos EA (2016) The effects of fiscal policy on CO2 emissions: evidence from the USA. Energy Policy 88:317–328. https://doi.org/10.1016/j.enpol.2015.10.035

Hadri K (2000) Testing for stationarity in heterogeneous panel data. Econ J 3:148–161

Hondroyiannis, George & Papapetrou, Evangelia, 1996. “An Examination of the Causal Relationship between Government Spending and Revenue: A Cointegration Analysis,” Public Choice, Springer, vol. 89(3–4), pages 363–374, December.

Hussain J, Khan A, Zhou K (2020) The impact of natural resource depletion on energy use and CO2 emission in belt & road initiative countries: a cross-country analysis. Energy 199:117409. https://doi.org/10.1016/j.energy.2020.117409

Ikram M, Zhang Q, Sroufe R, Shah SZA (2020) Towards a sustainable environment: the nexus between ISO 14001, renewable energy consumption, access to electricity, agriculture and CO2 emissions in SAARC countries. Sustain Product Consumpt. 22:218

Im KS, Pesaran MH, Shin Y (2003) Testing for unit roots in heterogeneous panels. J Econometrics 115(1):53–74

IPCC (2019) Special report on climate change and land. Ipcc January R (1999) Short-term energy outlook short-term energy outlook Javanajdadi (2017) Short-term load forecasting using grey models by considering demand response.

IPCC, (2013) Summary for Policy-makers. In: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex, and P.M. Midgley]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.

Islam F, Lopez R (2015) Government spending and air pollution in the US Int. Rev Env Resour Econ 8(2):139–189

Istaiteyeh RMS (2016) Causality analysis between electricity consumption and real GDP: evidence from Jordan. Int J Econ Perspect 10(4):526–540

Jamel L, Maktouf S (2017) The nexus between economic growth, financial development, trade openness, and CO2 emissions in European countries. Cogent Economics & Finance 5(1):1341456

Johansen S (1988) Statistical analysis of co-integration vectors. J Econ Dyn Control 12(2–3):231–254. https://doi.org/10.1016/0165-1889(88)90041-3

Kao C, Chiang MH (2000) On the estimation and inference of a cointegrated regression in panel data. In: Baltagi BH (ed) Advances in econometrics: nonstationary panels, panel cointegration and dynamic panels 15:179–222

Khan A, Chenggang Y, Bano S, Hussain J (2020a) The empirical relationship between environmental degradation, economic growth, and social well-being in Belt and Road Initiative countries. Environ Sci Pollut Res 27(24):30800–30814. https://doi.org/10.1007/s11356-020-09058-8

Khan A, Chenggang Y, Hussain J, Bano S (2019) Does energy consumption, financial development, and investment contribute to ecological footprints in BRI regions? Environ Sci Pollut Res 26(36):36952–36966. https://doi.org/10.1007/s11356-019-06772-w

Khan A, Chenggang Y, Hussain J, Kui Z (2021) Impact of technological innovation, financial development and foreign direct investment on renewable energy, non-renewable energy and the environment in belt & Road Initiative countries. Renewable Energy 171(March):479–491. https://doi.org/10.1016/j.renene.2021.02.075

Khan A, Chenggang Y, Hussain J, Bano S, Nawaz Aa, A. (2020b) Natural resources, tourism development, and energy-growth-CO2 emission nexus: a simultaneity modeling analysis of BRI countries. Resour Policy 68(May):101751. https://doi.org/10.1016/j.resourpol.2020.101751

Khan A, Chenggang Y, Khan G, Muhammad F (2020c) The dilemma of natural disasters: Impact on economy, fiscal position, and foreign direct investment alongside Belt and Road Initiative countries. Sci Total Environ 743:140578. https://doi.org/10.1016/j.scitotenv.2020.140578

Koda Y (2017) Intergenerational transfers, demographic transition, and altruism: problems in developing. Asia. 22:904

Ike GN, Usman O, Sarkodie SA (2020) Fiscal policy and CO2 emissions from heterogeneous fuel sources in Thailand: evidence from multiple structural breaks cointegration test. Sci Total Environ 702:134711. https://doi.org/10.1016/j.scitotenv.2019.134711

Levin A, Lin CF, Chu CSJ (2002) Unit root tests in panel data: asymptotic and finite-sample properties. J Econ 108(1):1–24. https://doi.org/10.1016/S0304-4076(01)00098-7

Liu Y, Han L, Yin Z, Luo K (2017) A competitive carbon emissions scheme with hybrid fiscal incentives: the evidence from a taxi industry. Energy Policy 102:414–422. https://doi.org/10.1016/j.enpol.2016.12.038

Liu Y, Li Z, Yin X (2018) The effects of three types of environmental regulation on energy consumption—evidence from China. Environ Sci Pollut Res 25(27):27334–27351

Maddala GS, Wu S (1999) A comparative study of unit root tests with panel data and a new simple test. Oxf Bull Econ Stat 61(S1):631–652. https://doi.org/10.1111/1468-0084.0610s1631

Ozcan B, Ari A (2017) Nuclear energy-economic growth nexus in OECD countries: a panel data analysis. Int J Econ Perspect 11(1):138–154

Pedroni P (1999) Critical values for co-integration tests in heterogeneous panels with multiple regressors. Oxf Bull Econ Stat 61(s1):653–670. https://doi.org/10.1111/1468-0084.61.s1.14

Pedroni P (2000) Fully modified OLS for heterogeneous co-integrated panels. In: Baltagi BH (ed) Non-stationary panels, panel co-integration and dynamic panels, 15. Elsevier, Amsterdam, pp 93–130. https://doi.org/10.1016/S0731-9053(00)15004-2

Pedroni P (2001) Purchasing power parity tests in co-integrated panels. Rev Econ Stat 83(4):727–731. https://doi.org/10.1162/003465301753237803

Pedroni P (2004) Panel co-integration: asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econ Theor 20:597–625

Pesaran MH, Shin Y, Smith RJ (2001) Bounds testing approaches to the analysis of level relationships. J Appl Econ 16(3):289–326. https://doi.org/10.1002/jae.616

Postula M, Radecka-Moroz K (2020) Fiscal policy instruments in environmental protection. Environmental Impact Assessment Review. https://doi.org/10.1016/j.eiar.2020.106435

Sun X, Chenggang Y, Khan A, Hussain J, Bano S (2021) The role of tourism, and natural resources in the energy-pollution-growth nexus: an analysis of belt and road initiative countries. J Environ Planning Manage 64(6):999–1020. https://doi.org/10.1080/09640568.2020.1796607

Uddin GA, Salahuddin M, Alam K, Gow J (2017) Ecological footprint and real income: panel data evidence from the 27 highest emitting countries. Ecol Ind 77:166–175. https://doi.org/10.1016/j.ecolind.2017.01.003

Wang S, Li Q, Fang C, Zhou C (2016) The relationship between economic growth, energy consumption, and CO2emissions: empirical evidence from China. Sci Total Environ 542(Pt A):360–371. https://doi.org/10.1016/j.scitotenv.2015.10.027

World Bank (2017) World development indicators. Retrieved from: http://www.worldbank.org

Yang G, Sun T, Wang J, Li X (2015) Modeling the nexus between carbon dioxide emissions and economic growth. Energy Policy 86:104–117. https://doi.org/10.1016/j.enpol.2015.06.031

Yasmeen R, Li Y, Hafeez M, Ahmad H (2018) The trade-environment nexus in light of governance: a global potential. Environ Sci Pollut Res 25:34360–34379

Yasmeen R, Li Y, Hafeez M (2019) Tracing the trade–pollution nexus in global value chains: evidence from air pollution indicators. Environ. Sci. Pollut. Res. 26:5221

Yuelan P, Akbar MW, Hafeez M, Ahmad M, Zia Z, Ullah S (2019) The nexus of fiscal policy instruments and environmental degradation in China. Environ Sci Pollut Res 26(28): 28919–28932. https://doi.org/10.1007/s11356-019-06071-4

Zhang S, Liu X, Bae J (2017) Does trade openness affect CO2 emissions: evidence from ten newly industrialized countries? Environ Sci Pollut Res 24:17616. https://doi.org/10.1007/s11356-017-9392-8

Zhao W, Cao Y, Miao B, Wang K, Wei YM (2018) Impacts of shifting China’s final energy consumption to electricity on CO2 emission reduction. Energy Economics 71:359–369

Zivot E, Andrews DWK (2002) Further evidence on the great crash, the oil-price shock, and the unit-root hypothesis. J Bus Econ Stat 20(1):25–44. https://doi.org/10.1198/073500102753410372