Economy, energy and environmental quality in APEC, 1990-2018

Abstract

Humanity faces the challenge of assure the well-being of the population while preserving the environmental quality. Therefore, this research aims to identify the relationship between economic growth, renewable energy consumption, fossil energy consumption and carbon dioxide emissions in the APEC economies during 1990-2018. Applying tests of cross dependence, intercept heterogeneity and unit root, were estimated as a model of Common Correlated Effects, as a novel proposal in this type of studies. The results show an inverted U-shaped trajectory between economic development and environmental pollution. It is noteworthy that a negative relationship was found between CO2 and renewable energy consumption and a positive relationship between CO2 and fossil energy consumption as well as the expected relationship between GDP, GDP2 and CO2. One of the shortcomings is the fact that the results are displayed as a whole for the economies in APEC and not for each individual economy. However, the methodology is a novelty for these type of research. It is recommended to increase the participation of renewable energies, to improve their efficiency and to promote their implementation as an effective means of reducing emissions.