Consumption-based carbon emissions and trade nexus: Evidence from nine oil exporting countries
Zeeshan Khana, Muhsin Alib, Jinyu Liua, Muhammad Qaiser Shahbazc✉, Yang Siquna
- aSchool of Economics and Management (SEM), Tsinghua University, Beijing, China
- bPakistan Institute of Development Economics (PIDE), Islamabad, Pakistan
- cSchool of Management and Economics, Beijing Institute of Technology, Beijing, China
- ✉Corresponding author
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Abstract
The relationship between international trade and carbon emissions has been studied extensively; nonetheless, consumption-based carbon emissions, which is adjusted for international trade, have not been studied. This study is an attempt to address the gap by using consumption-based carbon emissions which is adjusted for trade in case of oil-exporting countries. The effect of international trade is analyzed by treating exports and imports separately from 1990 to 2018. The long-run impact of all variables, i.e., exports, imports, and gross domestic product (GDP) is higher than the short-run coefficients. The empirical evidence, both in the long-run and short-run, confirms the negative effect of exports on consumption-based carbon emissions. Furthermore, gross domestic product (GDP) and imports have a positive and statistically significant impact on consumption-based carbon emissions both in the short-run and long-run. Policies related to consumption-based carbon emissions and international trade shall realize the effect of government policies to absorb it fully by taking approximately two years.