Hostname: page-component-8448b6f56d-c4f8m Total loading time: 0 Render date: 2024-04-24T13:21:44.577Z Has data issue: false hasContentIssue false
  • English
  • Français

CO2 emissions and militarization in G7 countries: panel cointegration and trivariate causality approaches

Published online by Cambridge University Press:  31 May 2017

Melike Bildirici
Melike Bildirici*
Affiliation:
Yildiz Technical University, FEAS, Department of Economics, Davutpaşa Campus, Esenler, Istanbul, Turkey. E-mail: melikebildirici@gmail.com
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper aims to test the relation among militarization, CO2 emissions, economic growth and energy consumption in G7 countries from 1985 to 2015 via panel methods. Long- and short-run coefficients and the causal relationship between the variables are important for G7 countries' energy policies and strategy. Cointegration among CO2 emissions, militarization, energy consumption and economic growth was determined by using panel Johansen and panel autoregressive distributed lag (PARDL) methods. Further, the panel trivariate causality test was applied and unidirectional causalities from militarization to CO2 emissions and from energy consumption to CO2 emissions were found. The evidence of bidirectional causality between per capita GDP and militarization, between per capita GDP and energy consumption, and between energy consumption and militarization was determined. The paper recommends that environmental and energy policies must recognize the differences in the relation between militarization, energy consumption and economic growth in order to maintain sustainable economic growth in the G7 countries.

Type
Research Article
Information
Environment and Development Economics , Volume 22 , Special Issue 6: Recent Advances in Empirical Analysis on Growth and Environment , December 2017 , pp. 771 - 791
Copyright
Copyright © Cambridge University Press 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Acaravcı, A. and Öztürk, İ (2010), ‘On the relationship between energy consumption, CO2 emissions and economic growth in Europe’, Energy 35: 5412–5420.Google Scholar
Akarca, A.T. and Long, T.V. (1980), ‘On the relationship between energy and GNP: a re-examination’, Journal of Energy and Development 5: 326–331.Google Scholar
Ang, J.B. (2007), ‘CO2 emissions, energy consumption, and output in France’, Energy Policy 35: 4772–4778.Google Scholar
Apergis, N. and Payne, J.E. (2009), ‘Energy consumption and economic growth in Central America: evidence from a panel cointegration and error correction model’, Energy Economics 31: 211–216.Google Scholar
Benoit, E. (1973), Defense and Economic Growth in Developing Countries, Boston, MD: D.C. Heath.Google Scholar
Benoit, E. (1978), ‘Growth and defense in developing countries’, Economic Development and Cultural Change 26(2): 271–280.Google Scholar
Bildirici, M. (2014), ‘Relationship between biomass energy and economic growth in the transition countries: panel ARDL approach’, GCB Bioenergy 6: 717–726.CrossRefGoogle Scholar
Bildirici, M. (2015), ‘Defense expenditure, economic growth and energy consumption in China’, ICEF2015, 26–27 November.Google Scholar
Bildirici, M. (2017), ‘CO2 emission, oil consumption and production, economic growth in MENAP countries: ARDL and ANOVA methods’, International Journal of Oil, Gas and Coal Technology 14(3): 264–302.CrossRefGoogle Scholar
Bildirici, M. and Bakirtas, T. (2016), ‘The relationship among oil and coal consumption, carbon dioxide emissions, and economic growth in BRICTS countries’, Journal of Renewable Sustainable Energy 8(4); doi:10.1063/1.4955090.CrossRefGoogle Scholar
Bildirici, M., Ersin, O., and Kokdener, M. (2011), ‘Genetic structure, consanguineous marriages and economic development: panel cointegration and panel cointegration neural network analyses’, Expert Systems with Applications 38(6): 6153–6163.Google Scholar
Caporale, G. and Pittis, N. (1997), ‘Causality and forecasting in incomplete systems’, Journal of Forecasting 16: 425–437.Google Scholar
Chang, C.C. (2010), ‘A multivariate causality test of carbon dioxide emission, energy consumption and economic growth in China’, Applied Energy 87: 3533–3537.Google Scholar
Clark, B. and Jorgenson, A.K. (2012), ‘Climate change’, in Ritzer, G. (ed.), The Wiley-Blackwell Encyclopedia of Globalization, Hoboken, NJ: Wiley-Blackwell, pp. 219–226.Google Scholar
Clark, B., Jorgenson, A.K., and Kentor, J. (2010), ‘Militarization and energy consumption: a test of treadmill of destruction theory in comparative perspective’, International Journal of Sociology 40(2): 23–43.CrossRefGoogle Scholar
Cole, M.A., Rayner, A.J., and Bates, J.M. (1997), ‘The environmental Kuznets curve: an empirical analysis’, Environment and Development Economics 2: 401–416.Google Scholar
Commoner, B. (1967), Science and Survival, New York: Viking Press.Google Scholar
Commoner, B. (1971), The Closing Circle, New York: Alfred A. Knopf.Google Scholar
De Bruyn, S.M., van den Bergh, J.C.J.M., and Opschoor, J.B. (1998) ‘Economic growth and emissions: reconsidering the empirical basis of environmental Kuznets curves’, Ecological Economics 25: 161–175.Google Scholar
EIA (2015), U.S. Energy-related Carbon Dioxide Emissions, 2014, Washington, DC: US Department of Energy, [Available at] https://www.eia.gov/environment/ emissions/carbon/pdf/2014_co2analysis.pdf.Google Scholar
EPA (n.d.), Overview of Greenhouse Gases, Washington, DC: EPA, [Available at] http://www3.epa.gov/climatechange/ghgemissions/gases/co2.html.Google Scholar
Erol, U. and Yu, E.S.H. (1987), ‘On the relationship between electricity and income for industrialized countries’, Journal of Electricity and Employment 13: 113–122.Google Scholar
Gao, J. and Zhang, L. (2014), ‘Electricity consumption–economic growth–CO2 emissions nexus in sub–Saharan Africa: evidence from panel cointegration’, African Development Review 26(2): 359–371.Google Scholar
Givens, J.E. (2014), ‘Global climate change negotiations: the treadmill of destruction and world society’, International Journal of Sociology 44: 27–36.Google Scholar
Grossman, G.M. and Krueger, A.B. (1991), ‘Environmental impacts of a North American Free Trade Agreement’, NBER Working Paper No. 3914, Cambridge, MA.Google Scholar
Grossman, G. and Krueger, A. (1995), ‘Economic growth and the environment’, Quarterly Journal of Economics 110(2): 352–377.Google Scholar
Hansen, B.E. (1995), ‘Rethinking the univariate approach to unit root testing: using covariates to increase power’, Econometric Theory 11(5): 1148–1171.CrossRefGoogle Scholar
Hausman, J. (1978), ‘Specification Tests in Econometrics’, Econometrica, 46: 1251–71.CrossRefGoogle Scholar
Hooks, G. and Smith, C.L. (2004), ‘The treadmill of destruction: national sacrifice areas and Native Americans’, American Sociological Review 69: 558–575.Google Scholar
Hooks, G. and Smith, C.L. (2005), ‘Treadmills of production and destruction’, Organization and Environment 18(1): 19–37.Google Scholar
IEA (2016), ‘Decoupling of global emissions and economic growth confirmed’, International Energy Agency, Paris, [Available at] https://www.iea.org/news room/news/2016/march/decoupling-of-global-emissions-and-economic-growth- confirmed.html.Google Scholar
Im, K.S., Pesaran, M.H., and Shin, Y. (2003), ‘Testing for unit roots in heterogeneous panels’, Journal of Econometrics 115: 53–74.Google Scholar
IMF (2014), World Economic Outlook Database, Washington, DC: International Monetary Fund, [Available at] http://www.imf.org/external/pubs/ft/weo/2014/02/ weodata/index.aspx.Google Scholar
Jorgenson, A.K. (2005), ‘Unpacking international power and the ecological footprints of nations: a quantitative cross-national study’, Sociological Perspectives 48(3): 383–402.Google Scholar
Jorgenson, A.K. and Clark, B. (2011), ‘Societies consuming nature: a panel study of the ecological footprints of nations, 1960–2003’, Social Science Research 40(1): 226–244.CrossRefGoogle Scholar
Jorgenson, A.K., Clark, B., and Kentor, J. (2010), ‘Militarization and the environment: a panel study of carbon dioxide emissions and the ecological footprints of nations, 1970–2000’, Global Environmental Politics 10(1): 7–23.Google Scholar
Jorgenson, A.K., Clark, B., and Givens, J.E. (2012), ‘The environmental impacts of militarization in comparative perspective: an overlooked relationship’, Nature and Culture 7(3): 314–337.CrossRefGoogle Scholar
Kaika, D. and Zervas, E. (2013), ‘The Environmental Kuznets Curve (EKC) theory – Part A: concept, causes and the CO2 emissions case’, Energy Policy 62: 1392–1402.CrossRefGoogle Scholar
Kao, C. (1999), ‘Spurious regression and residual-based tests for cointegration in panel data’, Journal of Econometrics 90(1): 1–44.Google Scholar
Kraft, J. and Kraft, A. (1978), ‘On the relationship between energy and GNP’, Journal of Energy and Development 3(2): 401–403.Google Scholar
Larsson, R. and Lyhagen, J. (2007), ‘Inference in panel cointegration models with long panels’, Journal of Business and Economic Statistics 25: 473–483.Google Scholar
Larsson, R., Lyhagen, J., and Löthgren, M. (2001), ‘Likelihood based cointegration tests in heterogenous panels’, Econometrics Journal 4: 109–142.Google Scholar
Lengyel, G.J.L. (2007), Department of Defense Energy Strategy Teaching an Old Dog New Tricks, The Brookings Institution, Department of Defense Energy Strategy, [Available at] https://www.brookings.edu/wp-content/uploads/2016/06/lengyel20070815.pdf Google Scholar
Levin, A., Lin, C.F., and Chu, C.J. (2002), ‘Unit root tests in panel data: asymptotic and finite sample properties’, Journal of Econometrics 108: 1–24.Google Scholar
Levy, B., Shahi, G.S., and Lee, C. (2000), ‘The environmental consequences of war’, in Levy, B.S. and Sidel, V.W. (eds), War and Public Health, Washington, DC: American Public Health Association.Google Scholar
Lim, K.M., Lim, S.Y., and Yoo, S.H. (2014) ‘Oil consumption, CO2 emission, and economic growth: evidence from the Philippines’, Sustainability 6: 967–979.Google Scholar
Lotfalipour, M.R., Falahi, M.A., and Ashena, M. (2010), ‘Economic growth, CO2 emissions, and fossil fuels consumption in Iran’, Energy 35(12): 5115–5120.Google Scholar
Meadows, D.H., Meadows, G., Randers, J., and Behrens, W.W. (1972), The Limits to Growth, New York: Universe Books.Google Scholar
Neslen, A. (2015), ‘Pentagon to lose emissions exemption under Paris climate deal’, The Guardian, 14 December, [Available at] http://www.theguardian.com/environment/2015/dec/14/pentagon-to-lose-emissions-exemption-under-paris-climate-deal.Google Scholar
NRC (2010), Advancing the Science of Climate Change, Washington, DC: National Research Council, National Academies Press.Google Scholar
Odhiambo, N.M. (2008), ‘Financial depth, savings and economic growth in Kenya: a dynamic causal relationship’, Economic Modelling 25(4): 704–713.CrossRefGoogle Scholar
Odhiambo, N.M. (2009), ‘Electricity consumption and economic growth in South Africa: a trivariate causality test’, Energy Economics 31: 635–640.CrossRefGoogle Scholar
Offermanns, C. (2006), ‘PPP in panel data and the role of long-run homogeneity in Europe’, Mimeo, Goethe University.Google Scholar
Olivier, J.G., Janssens-Maenhout, G., Muntean, M., and Peters, J.A.H.W. (2014), Trends in Global CO2 Emissions: 2014 Report, The Hague: PBL Netherlands Environmental Assessment Agency.Google Scholar
Omri, A. (2013), ‘CO2 emissions, energy consumption and economic growth nexus in MENA countries: evidence from simultaneous equations models’, Energy Economics 40: 657–664.CrossRefGoogle Scholar
Pao, H.-T. and Tsai, C.M. (2011), ‘Multivariate Granger causality between CO2 emissions, energy consumption, FDI (foreign direct investment) and GDP (gross domestic product): evidence from a panel of BRIC (Brazil, Russian Federation, India, and China) countries’, Energy 36: 685–693.CrossRefGoogle Scholar
Pedroni, P. (1996), ‘Fully modified OLS for heterogeneous cointegrated panels and the case of purchasing power parity’, Indiana University Working Papers in Economics, No. 96-020.Google Scholar
Pedroni, P. (1999), ‘Critical values for cointegration tests in heterogeneous panels with multiple regressors’, Oxford Bulletin of Economics and Statistics 61: 653–670.Google Scholar
Pedroni, P. (2001), ‘Purchasing power parity tests in cointegrated panels’, Review of Economics and Statistics 83(4): 727–731.CrossRefGoogle Scholar
Pesaran, M.H. (2004), ‘General diagnostic tests for cross section dependence in panels’, Working Paper, University of Cambridge.CrossRefGoogle Scholar
Pesaran, M.H. (2007), ‘A simple panel unit root test in the presence of cross section dependence’, Journal of Applied Econometrics 22(2): 265–312.CrossRefGoogle Scholar
Pesaran, M.H. and Smith, R.P. (1995), ‘Estimating long-run relationships from dynamic heterogeneous panels’, Journal of Econometrics 68(1): 79–113.Google Scholar
Pesaran, M., Shin, Y., and Smith, R.P. (1999), ‘Pooled mean group estimation of dynamic heterogeneous panels’, Journal of the American Statistical Association 94(446): 621–634.Google Scholar
Phillips, P. and Hansen, B. (1990), ‘Statistical inference in instrumental variables with I(1) processes’, Review of Economic Studies 57: 99–124.CrossRefGoogle Scholar
Renner, M. (1991), ‘Assessing the military's war on the environment’, in Brown, L. (ed.), State of the World, New York: W.W. Norton, pp. 132–152.Google Scholar
Rice, J. (2007), ‘Ecological unequal exchange: consumption, equity, and unsustainable structural relationships within the global economy’, International Journal of Comparative Sociology 48(1): 43–72.CrossRefGoogle Scholar
Sanders, B. (2009), The Green Zone: The Environmental Costs of Militarism, Oakland, CA: AK Press.Google Scholar
Selden, T.M. and Song, D. (1994), ‘Environmental quality and development: is there a Kuznets curve for air pollution?’, Journal of Environmental Economics and Management 27(2): 147–162.Google Scholar
Shafik, N. (1994), ‘Economic development and environmental quality – an econometric analysis’, Oxford Economic Papers 46: 757–773.CrossRefGoogle Scholar
Shafik, N. and Bandyopadhyay, S. (1992), ‘Economic growth and environmental quality: time series and cross section evidence’, Working paper, World Bank.Google Scholar
Soytas, U., Sari, R., and Ewing, B.T. (2007), ‘Energy consumption, income, and carbon emissions in the United States’, Ecological Economics 62: 482–489.CrossRefGoogle Scholar
Stock, J. and Watson, M.W. (1993), ‘A simple estimator of cointegrating vectors in higher order integrated systems’, Econometrica 61: 783–820.Google Scholar
Tucker, M. (1995), ‘Carbon dioxide emissions and global GDP’, Ecological Economics 15(3): 215–223.CrossRefGoogle Scholar
US Department of State (2007), Fourth Climate Action Report to the UN Framework Convention on Climate Change: Projected Greenhouse Gas Emissions, Washington, DC: US Department of State.Google Scholar
Wang, S.S., Zhou, D.Q, Zhou, P., and Wang, Q. (2011), ‘CO2 emissions, energy consumption and economic growth in China: a panel data analysis’, Energy Policy 39(9): 4870–4875.Google Scholar
York, R. (2008), ‘De-carbonization in former Soviet Republics, 1992–2000: the ecological consequences of de-modernization’, Social Problems 55: 370–390.CrossRefGoogle Scholar
Yu, E. and Choi, J.Y. (1985), ‘The causal relationship between energy and GNP: an international comparison’, Journal of Energy Development 10: 249–272.Google Scholar
Zhang, X.-P. and Cheng, X.-M. (2009), ‘Energy consumption, carbon emissions, and economic growth in China’, Ecological Economics 68: 2706–2712.Google Scholar