Are Trade Liberalization policies aligned with Renewable Energy Transition in low and middle income countries? An Instrumental Variable approach

By Muntasir Murshed. 2020

154 citations recorded by the source corpus.

This paper attempts to empirically analyze the compatibility of national trade liberalization policies with regards to promoting widespread use of renewable energy resources across 71 low, lower-middle and upper-middle income countries from South Asia, East Asia, Pacific, Central Asia, Latin America, Caribbean islands and Sub-Saharan Africa. Annual time series data from 2000 to 2017 is employed to perform panel data cointegration and regression analyses. The results from the cointegration analyses show long-run associations between trade liberalization policies and the renewable energy consumption indicators. The Instrumental Variable Two-Stage Least Squares panel data estimator is employed to control for the endogeneity in the dataset. The overall results broadly point towards the effectiveness of greater trade openness in facilitating renewable energy transition only in the low-income economies while prolonging the transition periods in the lower and upper-middle income countries. The marginal impact of a rise in the trade openness index is estimated to enhance the renewable energy share in total energy consumption within low-income countries by 0.24% as opposed to lowering this share by 0.19% within lower-middle income economies. However, trade liberalization is found to attribute to greater efficiency of renewable energy use across all the three income groups. Thus, these findings have critically important policy implications for the respective governments.

Subfields: Economics and Econometrics, Pollution, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/25fc3a6dcd9eec1eea824802213ec856d2aa65ad

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In Economics and Econometrics

1. M. H. Chadni
2. Jannatul Ferdaus
3. Muntasir Murshed
4. Nhung Dao

In Pollution

1. M. H. Chadni
2. Jannatul Ferdaus
3. Nhung Dao
4. Muntasir Murshed

In Renewable Energy, Sustainability and the Environment

1. M. H. Chadni
2. Jannatul Ferdaus
3. Nhung Dao
4. Muntasir Murshed

Citations in the corpus

• Revisiting the CO2 emission-induced EKC hypothesis in South Asia: the role of Export Quality Improvement (2020, background): “Moreover, the United Nations’ 2030 agenda of Sustainable Development Goals (SDG) has also highlighted the need for curbing CO2E, particularly via augmenting renewable energy resources into the global energy mix (Murshed 2020a).”
• Does ICT trade facilitate renewable energy transition and environmental sustainability? Evidence from Bangladesh, India, Pakistan, Sri Lanka, Nepal and Maldives (2020, methodology): “On the other hand, the application of ICT within the power sector can also attribute to electricity conservation by smartening the conventional grids that are prone to experiencing abrupt failures and shutdowns (Murshed 2020a).”