1. The asymmetric and long run effect of energy productivity on quality of environment in Finland.
- Author
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Kirikkaleli, Dervis and Sowah, James Karmoh
- Subjects
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ENVIRONMENTAL quality , *ENVIRONMENTAL degradation , *SUSTAINABILITY , *CARBON emissions , *ENERGY consumption , *ECONOMIC expansion - Abstract
This paper examines the asymmetric and long-run effect of energy productivity on the quality of the environment in Finland. Finland, as one of the Nordic countries, is a major contributor to the global drive to achieve decarbonization by 2050. In effect, this study seeks to contribute to the strides by querying the extent to which shocks in energy productivity make or mar the sustainability of the Finland environment from 1990:Q1 to 2019:Q4. The other impacts of financial development, economic growth, and trade openness are considered in the model estimated by using the novel hidden panel cointegration and nonlinear autoregressive distributed lag (NARDL) methodology. The results reveal a significant asymmetric equilibrium cointegration relationship among the variables over long-run time horizons; energy productivity utilization enhances the quality of the environment in Finland over the long run while trade openness, financial development, and economic growth contribute to environmental degradation in Finland in the long term. In particular, a 1% positive and negative fluctuation in energy productivity lowers carbon emissions by 1.79442% and 0.84799% in the long term. Whereas 1% change in trade openness, financial development, and economic growth trigger CO 2 emissions (CO 2 E) by 1.15298%, 0.271365%, and 2.93402% in Finland's economies. The results of the frequency domain causality model corroborate the NARDL results. On the basis of these empirical findings, this study suggests that policymakers in Finland should consider the asymmetric behavior among these variables in setting their trade, environmental, growth, and energy policies. [Display omitted] • The effect of energy productivity on environmental degradation in Finland is examined. • Nonlinear ARDL, Fourier ADL cointegration and frequnecy domain causality tests are employed. • Energy productivity leads to lower environmental degradation in Finland. • Energy productivity causes environmental sustainability at different frequencies. [ABSTRACT FROM AUTHOR]
- Published
- 2023
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