Asymmetric impact of pandemics-related uncertainty on CO2 emissions: evidence from top-10 polluted countries

Abstract

The recent COVD-19 pandemic has been a major shock, affecting various macroeconomic indicators, including the environmental quality. The question of how the pandemics-related uncertainty will affect the environment is of paramount importance. The study analyzes the asymmetric impact of pandemic uncertainty on CO2 emissions in top-10 polluted economies (China, USA, India, Russia, Germany, Japan, Iran, South Korea, Indonesia, and Saudi Arabia). Taking panel data from 1996 to 2018, a unique technique, 'Quantile-on-Quantile (QQ)', is employed. CO2 emissions are used as an indicator of environmental quality. The outcomes define how the quantiles of pandemic uncertainty impact the quantiles of carbon emissions asymmetrically by providing an effective paradigm for comprehending the overall dependence framework. The outcomes reveal that pandemic uncertainty promotes environmental quality by lowering CO2 emissions in our sample countries at various quantiles. However, Japan shows mixed findings. The effect of PUN on CO2 is substantially larger in India, Germany, and South Korea and lower in Russia and Saudi Arabia. Furthermore, the magnitude of asymmetry in the pandemic uncertainty-CO2 emissions association differs by economy, emphasizing that government must pay particular caution and prudence when adopting pandemics-related uncertainty and environmental quality policies.