Investigating the nexus between energy consumption, industrialization, urbanization, economic growth, and Carbon dioxide emission: Panel data analysis from the Belt and Road Initiative countries

Abstract

An increase in urbanization rises the use of energy in urban areas which leads to high carbon dioxide discharge and worsen environmental quality. Industrialization and economic growth are also linked with environmental quality and thus need to investigate the effect of these factors on environmental quality. This study uses panel data from 1976 to 2019 and investigate the nexus between urbanization, industrialization, economic growth, energy consumption and carbon dioxide emissions in the belt and road initiative countries using static and dynamic panel models. The findings reveals that the effect of urbanization, energy consumption, industrialization and economic growth on carbon dioxide emission is positive and it reduce environmental quality however, international trade significantly reduce carbon dioxide emission. This study further confirms the existence of a U-shape link between urbanization and carbon dioxide while the square term of economic growth doesn’t validate the Environmental Kuznets curve hypothesis. The findings of this study have considerable policy suggestions regarding carbon emission mitigation in term of urbanization, energy use, industrialization and economic growth.