Energy consumption, agriculture, forestation and CO2 emission nexus: an application to OECD countries

• Published in: Applied economics Vol. 55; no. 37; pp. 4359 - 4376
• Main Authors: Selvanathan, Saroja, Jayasinghe, Maneka Savithri, Selvanathan, Eliyathamby A, Abbas, Syed Ali, Iftekhar, Md Sayed
• Format: Journal Article
• Language: English
• Published: London Routledge 09.08.2023; Taylor & Francis Ltd
• Subjects: Agricultural production; Agriculture; Carbon dioxide; Deforestation; Economic analysis; Economic theory; Emissions trading; energy; Energy consumption; Environmental degradation; environmental kuznets curve framework; Environmental tax; forest cover; Fossil fuels; Hypotheses; Kuznets curve; OECD countries; Renewable energy; Renewable resources
• ISSN: 0003-6846; 1466-4283
• DOI: 10.1080/00036846.2022.2128296

The Environmental Kuznets Curve (EKC) hypothesis has been used to explain the relationship between environmental degradation and economic condition. This study formulates an augmented EKC framework to incorporate the effect of agriculture, forestation and energy consumption on CO 2 emission and estimates the model using the data from 24 OECD countries between 1990 and 2018. The study utilizes individual-country analysis and panel dynamic analysis for the empirical investigation. The results show a positive relationship between CO 2 emission and fossil fuel use - a 1% increase in fossil fuel consumption will increase CO 2 emission by 0.76%, and a negative relationship with renewable energy - a 1% increase in renewable energy consumption will reduce CO 2 emission by 0.14%. The impact of forest cover and agricultural production on CO 2 emission is mixed at the single-country level. The panel fixed-effect results reveal that a 1% increase in agricultural production and forest cover leads to a 0.04% and 0.63% increase in CO 2 emission, respectively. There is also strong evidence supporting the presence of the EKC hypothesis. The global CO 2 emission reduction strategies, such as carbon taxes and emission trading schemes, must acknowledge and incorporate the interplay among -key macro-level variables revealed in this study to enhance their effectiveness.