Econometrics of Green Energy Handbook: Economic and Technological Development

333 Pages·2020·6.874 MB·English

by  Muhammad Shahbaz, Daniel Balsalobre-Lorente

Muhammad Shahbaz
Daniel Balsalobre-Lorente   Editors
Econometrics
of Green
Energy
Handbook
Economic and Technological
Development
Econometrics of Green Energy Handbook
Muhammad Shahbaz Daniel Balsalobre-Lorente
(cid:129)
Editors
Econometrics of Green
Energy Handbook
Economic and Technological Development
123
Editors
Muhammad Shahbaz DanielBalsalobre-Lorente
Schoolof ManagementandEconomics Department ofPolitical Economy
Beijing Institute of Technology andPublic Finance
Beijing,China Universidad deCastilla-La Mancha
Cuenca,Spain
ISBN978-3-030-46846-0 ISBN978-3-030-46847-7 (eBook)
https://doi.org/10.1007/978-3-030-46847-7
©SpringerNatureSwitzerlandAG2020
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Contents
1 Impact of Energy Use Segregation on Carbon Emissions: The
Role of FDI in Net Importing and Net Exporting Countries. . . . . . 1
Avik Sinha, Oana M. Driha, Daniel Balsalobre-Lorente,
and José María Cantos-Cantos
1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.2.1 Economic Growth and Environmental Degradation. . . . 4
1.2.2 FDI and Environmental Degradation . . . . . . . . . . . . . . 6
1.2.3 Energy Use and Environmental Degradation . . . . . . . . 8
1.2.4 Oil Prices and CO Emissions. . . . . . . . . . . . . . . . . . . 9
2
1.2.5 Natural Resource Rents and Environmental
Degradation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.3 Mathematical Model and Data. . . . . . . . . . . . . . . . . . . . . . . . . 12
1.4 Results and Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.5 Concluding Remarks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2 The Impact ofOilPricesonCO Emissions inChina:AWavelet
2
Coherence Approach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Faik Bilgili, Erhan Mugaloglu, and Emrah Koçak
2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.2 Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.3 Wavelet Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.3.1 The Continuous Wavelet Transformation. . . . . . . . . . . 38
2.3.2 Complex Morlet Wavelet . . . . . . . . . . . . . . . . . . . . . . 40
2.3.3 Wavelet Coherence and Phase Difference . . . . . . . . . . 41
2.4 The Results of Wavelet Coherency and Partial Wavelet
Coherency Analyses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
v
vi Contents
2.5 Conclusions, Discussion and Some Policy
Recommendations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
3 The Effect of Internet Use on Air Quality: Evidence
from Low-Income Countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Burcu Ozcan and Esma Gultekin Tarla
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
3.2 Effects of ICT on Energy Demand and the Environment. . . . . . 61
3.2.1 Substitution Effects and Dematerialization Process . . . . 62
3.2.2 Compensation Effects (Income Effects) and Rebound
Effects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
3.3 Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
3.4 Model and Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
3.5 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
3.5.1 Cross-Sectional Dependence Tests. . . . . . . . . . . . . . . . 70
3.5.2 Smith et al. (2004) Panel Unit Root Tests . . . . . . . . . . 71
3.5.3 Westerlund (2008) and Pedroni (1999, 2004)
Cointegration Tests. . . . . . . . . . . . . . . . . . . . . . . . . . . 72
3.5.4 Panel ARDL Estimator of Pesaran et al. (1999) . . . . . . 75
3.6 Empirical Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
3.6.1 Results for Cross-Sectional Dependence and Panel
Unit Root Tests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
3.7 Conclusion and Policy Implication. . . . . . . . . . . . . . . . . . . . . . 81
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
4 Optimal Forecast Models for Clean Energy Stock Returns. . . . . . . 89
Victor Troster, Muhammad Shahbaz, and Demian Nicolás Macedo
4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
4.2 Data and Econometric Methodology . . . . . . . . . . . . . . . . . . . . 91
4.3 Empirical Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
4.4 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
5 The CausalityBetween EnergyConsumption,Urban Population,
Carbon Dioxide Emissions, and Economic Growth. . . . . . . . . . . . . 111
Nuno Carlos Leitão and Daniel Balsalobre-Lorente
5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
5.2 Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
5.3 Methodology and Hypotheses . . . . . . . . . . . . . . . . . . . . . . . . . 116
5.4 Empirical Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
5.5 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Contents vii
6 Investigation on the Job Creation Effect of Green Energy
in OECD Countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Mehmet Akif Destek, Ferda Nakipoglu Ozsoy, and Asli Ozpolat
6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
6.2 Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
6.3 Empirical Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
6.3.1 Empirical Model and Data . . . . . . . . . . . . . . . . . . . . . 139
6.3.2 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
6.4 Empirical Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
6.5 Conclusions and Policy Implications . . . . . . . . . . . . . . . . . . . . 145
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
7 Human Capital, Green Energy, and Technological Innovations:
Firm-Level Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
Muhammad Shujaat Mubarik and Navaz Naghavi
7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
7.2 Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
7.2.1 Green Energy and Human Capital. . . . . . . . . . . . . . . . 153
7.2.2 Technological Innovation in Energy-Human
Capital Dyad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
7.3 Model and Variables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
7.3.1 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
7.3.2 Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
7.4 Results and Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
7.5 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
7.6 Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
7.7 Limitations and Future Research Direction. . . . . . . . . . . . . . . . 162
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
8 Contemporary Dimensions of Econometrics of Green
Energy: A Review of Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
Naveed R. Khan, Arsalan Mujahid Ghouri, and Irum Gull
8.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
8.2 Energy Efficiency and Innovations. . . . . . . . . . . . . . . . . . . . . . 167
8.3 Technical Effect and Advances in Energy Usage . . . . . . . . . . . 168
8.4 Globalization and Green Energy Dynamics . . . . . . . . . . . . . . . 169
8.5 Green Economy and Clean Energy Technologies . . . . . . . . . . . 170
8.6 Green Energy Regulation and Environmental Quality . . . . . . . . 172
8.7 Oil Prices, Energy Shock and Green Energy. . . . . . . . . . . . . . . 173
8.8 Green Energy Modeling and Forecasting . . . . . . . . . . . . . . . . . 174
8.9 Foreign Direct Investment and Green Energy Demand . . . . . . . 175
8.10 Green Energy Usage and Economic Efficiency in Developed
and Developing Economies . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
8.11 GovernanceofGreenEnergyConsumption,Globalizationand
Financial Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
viii Contents
8.12 Green Finance, Financial Crisis, Economy and Environment . . . 178
8.13 Employment and Poverty Reduction (Income Inequality)
Aspects of Green Energy Production . . . . . . . . . . . . . . . . . . . . 179
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
9 TheSpilloverEffectfromOilandGasPrices:EvidenceofEnergy
Shocks from Diebold and Yilmaz Index . . . . . . . . . . . . . . . . . . . . . 189
Lucía Ibáñez-Luzón, Festus Victor Bekun, Andrew Adewale Alola,
and Daniel Balsalobre-Lorente
9.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
9.2 Energy Dynamics in Brief. . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
9.2.1 Energy-Related Crises . . . . . . . . . . . . . . . . . . . . . . . . 196
9.2.2 Energy Security of Supply and Market
Concentration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
9.2.3 Global Climate Crisis . . . . . . . . . . . . . . . . . . . . . . . . . 198
9.2.4 Green Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
9.2.5 Energy Efficiency and Conservation . . . . . . . . . . . . . . 200
9.2.6 Clean Energy Sources. . . . . . . . . . . . . . . . . . . . . . . . . 201
9.3 Methodological Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
9.3.1 Data Source. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
9.3.2 Empirical Method. . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
9.4 Concluding Remark and Policy Direction. . . . . . . . . . . . . . . . . 208
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
10 Comparison of Wave Energy and Offshore Wind. . . . . . . . . . . . . . 211
Laura Castro-Santos and Félix Puime Guillén
10.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211
10.2 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
10.3 Case of Study. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
10.4 Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216
10.5 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
11 Fresh Insight into the EKC Hypothesis in Nigeria: Accounting
for Total Natural Resources Rent. . . . . . . . . . . . . . . . . . . . . . . . . . 221
Festus Victor Bekun, Mary Oluwatoyin Agboola, and Udi Joshua
11.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222
11.2 Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
11.3 Data and Methodology Sequence. . . . . . . . . . . . . . . . . . . . . . . 233
11.4 Empirical Results and Discussion . . . . . . . . . . . . . . . . . . . . . . 233
11.5 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240
Contents ix
12 The Importance of Meta-Analysis in the Energy-Growth Nexus;
Guidelines for a Complete Implementation. . . . . . . . . . . . . . . . . . . 245
Angeliki N. Menegaki
12.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
12.2 Why Is Meta-Analysis Attractive for Energy-Growth
Researchers?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247
12.3 Presentation of Meta-Analysis Case Studies
in the Energy-Growth Nexus. . . . . . . . . . . . . . . . . . . . . . . . . . 247
12.3.1 Case Study 1: The Meta-Analysis on the
Energy-Growth Nexus by Menegaki (2014). . . . . . . . . 248
12.3.2 Case Study 2: The Meta-Analysis on Energy-Growth
Nexus by Kalimeris et al. (2014). . . . . . . . . . . . . . . . . 255
12.4 Concluding Remarks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260
13 Renewable Energy—Economic Growth Nexus: Addressing
Potential Issues of Endogeneity and the Precision
of the Long-Run Relationship. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
Adwoba Manyekyi Bentil and Philip Kofi Adom
13.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
13.2 Hydro-generation Sources in Ghana. . . . . . . . . . . . . . . . . . . . . 267
13.3 Method and Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269
13.3.1 Data Type and Sources. . . . . . . . . . . . . . . . . . . . . . . . 269
13.3.2 Theoretical Framework. . . . . . . . . . . . . . . . . . . . . . . . 269
13.3.3 Empirical Framework . . . . . . . . . . . . . . . . . . . . . . . . . 270
13.3.4 Econometric Technique . . . . . . . . . . . . . . . . . . . . . . . 272
13.3.5 Robustness Checks. . . . . . . . . . . . . . . . . . . . . . . . . . . 274
13.4 Results and Discussions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275
13.4.1 Preliminary Analysis of Data . . . . . . . . . . . . . . . . . . . 275
13.4.2 Testing for Cointegration . . . . . . . . . . . . . . . . . . . . . . 277
13.4.3 Testing for Causality . . . . . . . . . . . . . . . . . . . . . . . . . 277
13.4.4 Long-Run and Short-Run Effects of Hydropower
Energy Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280
13.4.5 Further Robustness Checks. . . . . . . . . . . . . . . . . . . . . 282
13.5 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287
14 How Does Environmental Degradation React to Stock Market
Development in Developing Countries?. . . . . . . . . . . . . . . . . . . . . . 291
Mert Topcu, Can Tansel Tugcu, and Oguz Ocal
14.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291
14.2 Model and Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293
x Contents
14.3 Methods and Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294
14.3.1 Unit Root Testing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 294
14.3.2 Cointegration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295
14.3.3 Estimation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296
14.4 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299
15 Determination of Asymmetries and Market Integration in the
Electricity and Crude Oil Markets . . . . . . . . . . . . . . . . . . . . . . . . . 303
Berenga Serwaa Jantuah and Philip Kofi Adom
15.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304
15.2 Method and Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307
15.2.1 Model Specification . . . . . . . . . . . . . . . . . . . . . . . . . . 308
15.2.2 Data Type and Source . . . . . . . . . . . . . . . . . . . . . . . . 309
15.3 Results and Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310
15.3.1 Unit Root Test. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310
15.3.2 Test of Long-Run Equilibrium . . . . . . . . . . . . . . . . . . 310
15.3.3 Test of Long-Run and Short-Run Asymmetries . . . . . . 314
15.3.4 Robustness Check . . . . . . . . . . . . . . . . . . . . . . . . . . . 317
15.3.5 Asymmetry in Electricity Consumption to Price
Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321
15.4 Conclusion and Policy Recommendation . . . . . . . . . . . . . . . . . 327
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328