Search

Carbon neutral is among the possible ways of solving the problem of climate change. Many scholars have utilized different single indicators such as CO2 and methane with different variables to mitigate the possible ways of solving the problem of global warming. The present study employs a specific country (UAE) approach to investigate the possible way of solving climate change. The author utilized 1980–2018 annual data of the UAE to investigate the possibility of carbon neutral in the UAE as to suggest ways of limiting climate change. Both linear and non-linear (squared) foreign direct investment (FDI) and GDP per capita were added to the study and considered as the variables of interest and other control variables (energy use and population). Among the findings of this study are inverted U-shaped relationship between economic growth (GDP per capita) and ecological footprint which confirms EKC for the UAE, positive relationship between energy use and ecological footprint, negative relationship between FDI and ecological footprint in all stages which established a flat pattern of relationship, and a positive relationship between the population and ecological footprint. Findings from causal analyses exposed a two-way direction or feedback (bidirectional) between economic growth (GDP) and urban population, and between energy use and urban population both in the short and long run. Also, a one-way transmission (unidirectional) is found transmitting from ecological footprint and FDI to population both in the short run and long run; from the ecological footprint, energy use, and FDI to economic growth; from the ecological footprint and FDI to energy use in the long run; and from ecological footprint to FDI and energy use in the short run. The policy focus should be towards the improvement on the urban population. FDI pattern suggests the pollution halo hypothesis which is a pointer towards its (FDI) crucial contribution to environmental performance. Hence, FDI should be encouraged through relaxing of some laws that are preventive in nature towards FDI so as to maintain this positive trend towards sustainable development. [ABSTRACT FROM AUTHOR]

The current study examines the effect caused by potential shock arising from the Australia's 'Direct Action' policy in renewable energy, fossil fuel energy, and foreign direct investment (FDI). Considering the Australia's stake in the energy industrial chain system (production, distribution and marketing) that is majorly fossil fuel-based (coal and gas), it can be said that Australia is occupying a strategic position in the global climate development. For effective investigation and discussion of the findings from this study, we utilized the country's national data of 1996Q1-2018Q4 with different scientific approaches (such as structural break test and short- and long run asymmetric relationships). Emphasis on the findings and discussions is based on both the short run and long inferences arising from positive and negative shocks. The result informed that economic growth and FDI are found to negatively affect environmental quality in Australia by increasing the country's carbon emissions. This observation is inherent when there are positive and negative shocks on economic growth while only a positive shock on FDI creates an environmental effect. Further into the findings is the mitigating power of Australian renewable energy sources in its economic and environmental development. This is confirmed with positive shocks to renewable energy reducing carbon emission at the level of 23 percent while the negative shock increases carbon emissions by 16 percent. The findings imply that the economic activities and FDI penetration in Australia are done in energy cum carbon intensive ground. Additionally, evidence shows that energy transition policy is vital towards the achievement of Australian climate goal of 2030 as such a negative shock on alternative energy development such as limited energy financing and reduction or discontinued clean technology subsidies should be discouraged. • Australia's carbon neutrality ambition is examined. • Economic growth and FDI spur environmental damage. • Positive and negative shocks on economic growth hampers environmental quality. • Positive shock on FDI creates an environmental degradation. • Positive (negative) shocks to renewable energy mitigates (spur) carbon emission by 23% (16%). [ABSTRACT FROM AUTHOR]