Modelling the Globalization-CO2 Emissions Nexus: Evidence From Quantile-on-Quantile Approach

Abstract

Abstract Sustainable development policies for achieving net-zero emissions require understanding the factors that influence CO2 emissions. Capitalizing on the limitations of the existing literature, this study applies the Quantile-on-Quantile (QQ) approach to investigate economic globalization’s impact on CO2 emissions in Australia for 1970-2018. The results from the QQ revealed a positive feedback linkage between globalization and CO2 emissions at all quantiles. The results further indicated that while there is a positive feedback linkage between economic growth and CO2 emissions at most quantiles, a positive feedback interconnection exists between CO2 pollution and coal consumption at all quantiles. As a robustness check, we employed the quantile regression (QR) test, and the results from QR are consistent with the findings from QQ. The consistency of the results suggests that these study findings are reliable and suitable for informing policies that seek to address CO2 emissions in Australia. The policy implications for Australia are discussed.JEL Classification: C14; C22; F64; Q56