The Urbanization Effect on CO2 Emissions: New Evidence of Dynamic Panel Heterogeneity in Asian Countries

Abstract

The great debates whether the transaction from rural to cities brings a better life or in the way around in Asia Countries have captured global attention. This study provides empirical evidences on the urbanization- emissions nexus for a sample of 34 Asian countries from 1990 to 2016 which obtained from the time series databased of Emissions Database for Global Atmospheric Research EDGAR and World Development Indicator WDI . This article aims to assess the possibility of urbanization role in counteract the growth of emissions by examine the possibilities of non-linear relationship or specifically the possibility of the Kuznets’ hypothesis. Due to the structural heterogeneity exists widely across countries in Asian countries, this paper employ Stochastic Impact by Regression on Population, Affluence, Technology STRIPAT model as its analytical framework and estimate using the Dynamic Common Correlated Effects DCCE estimator to address the heterogeneity, cross-section dependence, and dynamics nature of carbon emissions. The result shows that, initially, the emissions intensify along with the growth of urbanization, and at higher urbanization bound to reduce the emissions as presented in quadratic functional. Nevertheless an N-shape relationship observe in cubic functional. The finding of this paper have important implication on the Asian countries policymakers in archiving the sustainable urban society.

Keywords

• Asian Countries,Urbanization,Carbon Emissions,STRIPAT,Dynamic Common Correlated Effects DCCE

Kaynakça

1. Adusah-Poku, F. (2016). Carbon dioxide emissions, urbanization and population: empirical evidence from Sub
2. Sahran Africa. Energy Economics Letters, 3(1), 1-16. Ahmad, A., Zhao, Y., Shahbaz, M., Bano, S., Zhang, Z., Wang, S., & Liu, Y. (2016). Carbon emissions, energy consumption and economic growth: An aggregate and disaggregate analysis of the Indian economy. Energy Pol- icy, 96, 131-143.
3. Al Mamun, M., Sohag, K., Mia, M. A. H., Uddin, G. S., & Ozturk, I. (2014). Regional differences in the dynamic linkage between CO2 emissions, sectoral output and economic growth. Renewable and Sustainable En- ergy Reviews, 38, 1-11.
4. Ameer, A., & Munir, K. (2016). Effect of Economic Growth, Trade Openness, Urbanization, and Technology on Environment of Selected Asian Countries.
5. Asian Development Bank, A. (2011). Key Indicators for Asia and the Pacific 2011: Asian Development Bank.
6. Azam, M., & Khan, A. Q. (2016). Urbanization and environmental degradation: Evidence from four SAARC countries—Bangladesh, India, Pakistan, and Sri Lanka. Environmental Progress & Sustainable Energy, 35(3), 832.
7. Beck, K. A., & Joshi, P. (2015). An Analysis of the Environmental Kuznets Curve for Carbon Dioxide Emis- sions: Evidence for OECD and Non-OECD Countries. European Journal of Sustainable Development, 4(3), 33
8. Chudik, A., & Pesaran, M. H. (2015). Common correlated effects estimation of heterogeneous dynamic panel data models with weakly exogenous regressors. Journal of Econometrics, 188(2), 393-420.

9. Dhami, J. K., Singh, H., & Gupta, M. (2013). Industrialization at the cost of environment degradation-a case of leather and iron and steel industry from Punjab economy. Innovative Journal of Business and Management, 2(01).
10. Ehrlich, P. R., & Holdren, J. P. (1971). Impact of population growth. Science, 171(3977), 1212-1217.
11. ESCAP, U. (2017). Economic and social survey of asia and the pacific 2017. In: United Nations publication
12. Felipe, J., Bayudan-Dacuycuy, C., & Lanzafame, M. (2016). The declining share of agricultural employment in China: How fast? Structural Change and Economic Dynamics, 37, 127-137.
13. Guo, J., Xu, Y., & Pu, Z. (2016). Urbanization and its effects on industrial pollutant emissions: An empirical study of a chinese case with the spatial panel model. Sustainability, 8(8), 812.
14. Hocaoglu, F. O., & Karanfil, F. (2011). Examining the link between carbon dioxide emissions and the share of industry in GDP: Modeling and testing for the G-7 countries. Energy Policy, 39(6), 3612-3620.
15. Kais, S., & Sami, H. (2016). An econometric study of the impact of economic growth and energy use on carbon emissions: panel data evidence from fifty eight countries. Renewable and Sustainable Energy Reviews, , 1101-1110.
16. Li, K., & Lin, B. (2015). Impacts of urbanization and industrialization on energy consumption/CO2 emissions: does the level of development matter? Renewable and Sustainable Energy Reviews, 52, 1107-1122.
17. Martínez-Zarzoso, I., & Maruotti, A. (2011). The impact of urbanization on CO2 emissions: evidence from developing countries. Ecological Economics, 70(7), 1344-1353.
18. Ota, T. (2017). Economic growth, income inequality and environment: assessing the applicability of the Kuz- nets hypotheses to Asia. Palgrave Communications, 3, 17069.
19. Panayotou, T. (1993). Empirical tests and policy analysis of environmental degradation at different stages of economic development. Retrieved from
20. Pesaran. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of applied econometrics, 22(2), 265-312.
21. Pesaran, M. H., Shin, Y., & Smith, R. P. (1999). Pooled mean group estimation of dynamic heterogeneous panels. Journal of the American Statistical Association, 94(446), 621-634.
22. Poumanyvong, P., & Kaneko, S. (2010). Does urbanization lead to less energy use and lower CO2 emissions?
23. A cross-country analysis. Ecological Economics, 70(2), 434-444. Poumanyvong, P., Kaneko, S., & Dhakal, S. (2012). evelopmnet iscussion olicy aper.
24. Rafiq, S., Salim, R., & Apergis, N. (2016). Agriculture, trade openness and emissions: an empirical analysis and policy options. Australian Journal of Agricultural and Resource Economics, 60(3), 348-365.
25. Sadorsky, P. (2014). The effect of urbanization on CO2 emissions in emerging economies. Energy Economics, , 147-153.
26. Salim, R. A., Rafiq, S., & Shafiei, S. (2017). Urbanization, energy consumption, and pollutant emission in
27. Asian developing economies: An empirical analysis. Retrieved from Sen, K. (2016). The Determinants of Structural Transformation in Asia: A Review of the Literature.
28. Shahbaz, M., Loganathan, N., Muzaffar, A. T., Ahmed, K., & Jabran, M. A. (2016). How urbanization affects
29. CO2 emissions in Malaysia? The application of STIRPAT model. Renewable and Sustainable Energy Reviews, , 83-93. Sohag, K., Al Mamun, M., Uddin, G. S., & Ahmed, A. M. (2017). Sectoral output, energy use, and CO2 emission in middle-income countries. Environmental Science and Pollution Research, 24(10), 9754-9764. doi:10.1007/s11356-017-8599-z
30. Taghvaee, V. M., & Parsa, H. (2015). Economic growth and environmental pollution in Iran: evidence from manufacturing and services sectors. Custos E Agronegocio Line, 11(1), 115-127.
31. World Bank Group, W. (2018). World development indicators 2018: World Bank Publications.
32. Zhang, L., Hu, Q., & Zhang, F. (2014). Input-output modeling for urban energy consumption in Beijing: dynamics and comparison. Plos one, 9(3), e89850.
33. Zhang, N., Yu, K., & Chen, Z. (2017). How does urbanization affect carbon dioxide emissions? A cross- country panel data analysis. Energy Policy, 107, 678-687.
34. Zhu, Q., & Peng, X. (2012). The impacts of population change on carbon emissions in China during 1978–
35. Environmental Impact Assessment Review, 36, 1-8.