THE IMPACT OF EXPORT DIVERSIFICATION ON CO2 EMISSIONS: EVIDENCE FROM POLAND

Abstract

The study aims to analyze the impact of export diversification on CO2 emissions over the period of 1990–2015 in Poland by ARDL bounds test approach. For the export diversification, three variables were used: export product diversification, export margin and import margin. A cointegration relationship was determined for all models in the study. Export product diversification and import margin long-run coefficients were found to be statistically significant and positive. This means that export diversification increases environmental degradation. GDP and economic complexity are additional factors that negatively impact the environment. In contrast, urbanization reduces CO2 emissions. Based on the empirical results, this paper recommends innovative solutions and regulations for eco-friendly industrial manufacturing. European Union environmental policies should be strictly adopted by the member countries in order to reduce emissions.