Skip to main content

Advertisement

SpringerLink
Log in

Industrial growth and CO2 emissions in Vietnam: the key role of financial development and fossil fuel consumption

  • Research Article
  • Published:
Environmental Science and Pollution Research Aims and scope Submit manuscript

Abstract

The increase in greenhouse gas emission has a major global issue, catching the attention of the researcher and policymakers around the world. The combustion of fossil fuel is the main cause of the rising greenhouse gas emission particularly in developing countries including Vietnam. Meanwhile, the purpose of the study is to evaluate the linkage between fossil fuel consumption, financial development, industrial progression, and CO2 emission over the period from 1970 to 2019, particularly in Vietnam. The study applied the ARDL econometric technique and Bayer-Hanck cointegration approach with structural break to confirm long run relationship and the EKC hypothesis between industrial growth and CO2 emission, in Vietnam, which assume the U-shaped link between CO2 emission and industrial growth in Vietnam. Which further confirmed by Lind and Mehlum U test in addition, the Granger causality exists between fossil fuel consumption and CO2 emission in both short run and long run. The causal relationship is unidirectional in the short run running from fossil fuel consumption and carbon dioxide emission; therefore, the study proposed to adopt low-carbon emission technology.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig 1

Similar content being viewed by others

References

  • Abbasi F, Riaz K (2016) CO2 emissions and financial development in an emerging economy: an augmented VAR approach. Energy Policy 90:102–114

    Google Scholar 

  • Abokyi E, Appiah-Konadu P, Abokyi F, Oteng-Abayie EF (2019) Industrial growth and emissions of CO2 in Ghana: The role of financial development and fossil fuel consumption. Energy Rep 5:1339–1353

    Google Scholar 

  • Adjei Kwakwa P, et al (2018) “Environmental Kuznets curve hypothesis in a financial development and natural resource extraction context: evidence from Tunisia.

    Google Scholar 

  • Al-Mulali U et al (2015) Investigating the environmental Kuznets curve hypothesis in Vietnam. Energy Policy 76:123–131

    Google Scholar 

  • Asumadu-Sarkodie S, Owusu PA (2016) Carbon dioxide emissions, GDP, energy use, and population growth: a multivariate and causality analysis for Ghana, 1971–2013. Environ Sci Pollut Res 23(13):13508–13520

    CAS  Google Scholar 

  • Bai J, Perron P (1998) Estimating and testing linear models with multiple structural changes. Econometrica 66:47–78

    Google Scholar 

  • Banerjee A, Dolado J, Mestre R (1998) Error-correction mechanism tests for cointegration in a single-equation framework. J Time Ser Anal 19(3):267–283

    Google Scholar 

  • Başarir Ç, Çakir YN (2015) Causal interactions between CO2 emissions, financial development, energy and tourism. Asian Econ Financ Rev 5(11):1227–1238

    Google Scholar 

  • Bayer C, Hanck C (2013) Combining non-cointegration tests. J Time Ser Anal 34(1):83–95

    Google Scholar 

  • Begum RA et al (2015) CO2 emissions, energy consumption, economic and population growth in Malaysia. Renew Sust Energ Rev 41:594–601

    Google Scholar 

  • Bilgili F, Koçak E, Bulut Ü (2016) The dynamic impact of renewable energy consumption on CO2 emissions: a revisited Environmental Kuznets Curve approach. Renew Sust Energ Rev 54:838–845

    Google Scholar 

  • Binh PT (2011) Energy consumption and economic growth in Vietnam: Threshold cointegration and causality analysis. Int J Energy Econ Policy 1(1):1

    Google Scholar 

  • Boswijk HP (1994) Testing for an unstable root in conditional and structural error correction models. J Econ 63(1):37–60

    Google Scholar 

  • Bryun S et al (1998) Economic growth and emissions: reconsidering the empirical basis of environmental curves. Ecol Econ 25:161–175

    Google Scholar 

  • Chakrabarty D (2019) Museums between globalisation and the anthropocene. Mus Int 71(1-2):12–19

    Google Scholar 

  • Collste G (2016) Globalization and global justice-a thematic introduction. De Ethica. A Journal of Philosophical, Theological and Applied Ethics 3(1):5–17

    Google Scholar 

  • Cole MA (2004) Trade, the pollution haven hypothesis and the environmental Kuznets curve: examining the linkages. Ecol Econ 48(1):71–81

    Google Scholar 

  • Dickey DA, Fuller WA (1979) Distribution of the estimators for autoregressive time series with a unit root. J Am Stat Assoc 74(366a):427–431

    Google Scholar 

  • Dickey DA, Fuller WA (1981) Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica: Journal of the Econometric Society:1057–1072

  • Engle RF, Granger CW (1987) Co-integration and error correction: representation, estimation, and testing. Econometrica: journal of the Econometric Society 55:251–276

    Google Scholar 

  • Esteve V, Tamarit C (2012) Threshold cointegration and nonlinear adjustment between CO2 and income: the environmental Kuznets curve in Spain, 1857–2007. Energy Econ 34(6):2148–2156

    Google Scholar 

  • Farhani S, et al (2014) “Coal consumption, industrial production and CO2 emissions in China and India.” Department of Research–Ipag Business School Working Papers 2225.

  • Fodha M, Zaghdoud O (2010) Economic growth and pollutant emissions in Tunisia: an empirical analysis of the environmental Kuznets curve. Energy Policy 38(2):1150–1156

    CAS  Google Scholar 

  • Galeotti M, Lanza A, Pauli F (2006) Reassessing the environmental Kuznets curve for CO2 emissions: A robustness exercise. Ecol Econ 57(1):152–163

    Google Scholar 

  • Gökmenoğlu K, Taspinar N (2016) The relationship between CO2 emissions, energy consumption, economic growth and FDI: the case of Turkey. The Journal of International Trade & Economic Development 25(5):706–723

    Google Scholar 

  • Grossman G, Krueger A (1991) Environmental impacts of a north American free trade agreement. Natl Bur Econ Res Work Pap Ser No 3914:1–57

    Google Scholar 

  • Grossman GM, Krueger AB (1995) Economic growth and the environment. Q J Econ 110(2):353–377

    Google Scholar 

  • Grossman GM, Krueger AB (1996) The inverted-U: what does it mean? Environ Dev Econ 1(1):119–122

    Google Scholar 

  • Hettige H, Mani M, Wheeler D (2000) Industrial pollution in economic development: the environmental Kuznets curve revisited. J Dev Econ 62(2):445–476

    Google Scholar 

  • Hughes TP, Kerry JT, Álvarez-Noriega M, Álvarez-Romero JG, Anderson KD, Baird AH, Babcock RC, Beger M, Bellwood DR, Berkelmans R, Bridge TC, Butler IR, Byrne M, Cantin NE, Comeau S, Connolly SR, Cumming GS, Dalton SJ, Diaz-Pulido G, Eakin CM, Figueira WF, Gilmour JP, Harrison HB, Heron SF, Hoey AS, Hobbs JPA, Hoogenboom MO, Kennedy EV, Kuo CY, Lough JM, Lowe RJ, Liu G, McCulloch MT, Malcolm HA, McWilliam MJ, Pandolfi JM, Pears RJ, Pratchett MS, Schoepf V, Simpson T, Skirving WJ, Sommer B, Torda G, Wachenfeld DR, Willis BL, Wilson SK (2017) Global warming and recurrent mass bleaching of corals. Nature 543(7645):373–377

    CAS  Google Scholar 

  • Iwata H et al (2010) Empirical study on the environmental Kuznets curve for CO2 in France: the role of nuclear energy. Energy Policy 38(8):4057–4063

    Google Scholar 

  • Jalil A, Feridun M (2014) Energy-driven economic growth: Energy consumption—economic growth nexus revisited for China. Emerg Mark Financ Trade 50(5):159–168

    Google Scholar 

  • Johansen S (1991) Estimation and hypothesis testing of cointegration vectors in Gaussian vector autoregressive models. Econometrica: journal of the Econometric Society 59:1551–1580

    Google Scholar 

  • Kaltenegger O, Löschel A, Pothen F (2017) The effect of globalisation on energy footprints: disentangling the links of global value chains. Energy Econ 68:148–168

    Google Scholar 

  • Koçak E, Ulucak ZŞ (2019) The effect of energy R&D expenditures on CO 2 emission reduction: estimation of the STIRPAT model for OECD countries. Environ Sci Pollut Res 26(14):14328–14338

    Google Scholar 

  • Kuznets S (1955) Economic growth and income inequality. Am Econ Rev 45(1):1–28

    Google Scholar 

  • Kwakwa PA et al (2014) Environmental degradation effect of agricultural and industrial growth in Ghana. J Rural Ind Dev 2(2):22

    Google Scholar 

  • Lamba J et al (2019) Industrialization and global warming (a brief case analysis of palm oil production: indonesia).

  • Liddle B, Messinis G (2015) Revisiting sulfur Kuznets curves with endogenous breaks modeling: Substantial evidence of inverted-Us/Vs for individual OECD countries. Econ Model 49:278–285

    Google Scholar 

  • Lind JT, Mehlum H (2010) With or without U? The appropriate test for a U-shaped relationship. Oxf Bull Econ Stat 72(1):109–118

    Google Scholar 

  • Lindmark M (2002) An EKC-pattern in historical perspective: carbon dioxide emissions, technology, fuel prices and growth in Sweden 1870–1997. Ecol Econ 42(1-2):333–347

    Google Scholar 

  • Mgbemene CA et al (2016) Industrialization and its backlash: focus on climate change and its consequences. J Environ Sci Technol 9(4):301

    CAS  Google Scholar 

  • Mishra P, Pandey CM, Singh U, Gupta A, Sahu C, Keshri A (2019) Descriptive statistics and normality tests for statistical data. Ann Card Anaesth 22(1):67–72

    Google Scholar 

  • Narayan PK, Smyth R (2004) Temporal causality and the dynamics of exports, human capital and real income in China. Int J Appl Econ 1(1):24–45

    Google Scholar 

  • Ozturk I, al-Mulali U, Saboori B (2016) Investigating the environmental Kuznets curve hypothesis: the role of tourism and ecological footprint. Environ Sci Pollut Res 23(2):1916–1928

    Google Scholar 

  • Perron P (1997) Further evidence on breaking trend functions in macroeconomic variables. J Econom 80(2):355–385

    Google Scholar 

  • Perron P, Yabu T (2009) Testing for shifts in trend with an integrated or stationary noise component. J Bus Econ Stat 27(3):369-396

  • Pesaran MH, Shin Y, Smith RJ (2001) Bounds testing approaches to the analysis of level relationships. J Appl Econ 16(3):289–326

    Google Scholar 

  • Phillips PC, Ouliaris S (1990) Asymptotic properties of residual based tests for cointegration. Econometrica: journal of the Econometric Society:165–193

  • Rafindadi AA (2015) “Econometric prediction on the effects of financial development and trade openness on the German energy consumption: a startling revelation from the data set.”

    Google Scholar 

  • Riedel J (1997) The Vietnamese economy in the 1990s. Asian-Pacific Econ Lit 11(2):58–65

    Google Scholar 

  • Romero-Ávila D (2008) Convergence in carbon dioxide emissions among industrialised countries revisited. Energy Econ 30(5):2265–2282

    Google Scholar 

  • Saboori B, Sulaiman J (2013) Environmental degradation, economic growth and energy consumption: Evidence of the environmental Kuznets curve in Malaysia. Energy Policy 60:892–905

    Google Scholar 

  • Saint Akadiri S, Alola AA, Akadiri AC, Alola UV (2019) Renewable energy consumption in EU-28 countries: policy toward pollution mitigation and economic sustainability. Energy Policy 132:803–810

    Google Scholar 

  • Sarkodie SA, Strezov V (2018) Empirical study of the environmental Kuznets curve and environmental sustainability curve hypothesis for Australia, China, Ghana and USA. J Clean Prod 201:98–110

    Google Scholar 

  • Shafik N, Bandyopadhyay S (1992) Economic growth and environmental quality: time-series and cross-country evidence. World Bank Publications

  • Shahbaz M, Salah Uddin G, Ur Rehman I, Imran K (2014) Industrialization, electricity consumption and CO2 emissions in Bangladesh. Renew Sust Energ Rev 31:575–586

    CAS  Google Scholar 

  • Shahbaz, M., et al. (2015). “Growth-globalisation-emissions nexus: the role of population in Australia.” Monash Business School Discussion Paper 23(15): p1-33.

  • Shahbaz M et al (2016) Multivariate Granger causality between CO2 emissions, energy intensity and economic growth in Portugal: evidence from cointegration and causality analysis. Technol Econ Dev Econ 22(1):47–74

    Google Scholar 

  • Shahbaz M, Bhattacharya M, Ahmed K (2017) CO2 emissions in Australia: economic and non-economic drivers in the long-run. Appl Econ 49(13):1273–1286

    Google Scholar 

  • Shahbaz M, Naeem M, Ahad M, Tahir I (2018a) Is natural resource abundance a stimulus for financial development in the USA? Res Policy 55:223–232

    Google Scholar 

  • Shahbaz M, Zakaria M, Shahzad SJH, Mahalik MK (2018b) The energy consumption and economic growth nexus in top ten energy-consuming countries: Fresh evidence from using the quantile-on-quantile approach. Energy Econ 71:282–301

    Google Scholar 

  • Shahbaz M, Haouas I, Hoang THV (2019) Economic growth and environmental degradation in Vietnam: Is the environmental Kuznets curve a complete picture? Emerg Mark Rev 38:197–218

    Google Scholar 

  • Tang CF, Tan BW (2015) The impact of energy consumption, income and foreign direct investment on carbon dioxide emissions in Vietnam. Energy 79:447–454

    Google Scholar 

  • Thomas E (2017) Globalization, cultural diversity and teacher education. In: Globalisation, education and culture shock, Routledge, pp 152–170

  • Twerefou DK, Adusah-Poku F, Bekoe W (2016) An empirical examination of the Environmental Kuznets Curve hypothesis for carbon dioxide emissions in Ghana: an ARDL approach. Environ Socio-econ Stud 4(4):1–12

    Google Scholar 

  • World Bank Group (2017) World development indicators 2017. World Bank

  • World Bank (2019) Research and development expenditure (% GDP)

  • Xu Z, Baloch MA, Meng F, Zhang J, Mahmood Z (2018) Nexus between financial development and CO 2 emissions in Saudi Arabia: analyzing the role of globalization. Environ Sci Pollut Res 25(28):28378–28390

    CAS  Google Scholar 

  • Yalcin FA, Yalcin M (2017) Turkish primary science teacher candidates’ understandings of global warming and ozone layer depletion. J Educ Train Stud 5(10):218–230

    Google Scholar 

  • Yuxiang K, Chen Z (2011) Financial development and environmental performance: evidence from China. Environ Dev Econ 16(1):93–111

    Google Scholar 

  • Zhang Y-J (2011) The impact of financial development on carbon emissions: An empirical analysis in China. Energy Policy 39(4):2197–2203

    Google Scholar 

  • Zivot E, Andrews DWK (2002) Further evidence on the great crash, the oil-price shock, and the unit-root hypothesis. J Bus Econ Stat 20(1):25–44

    Google Scholar 

Download references

Acknowledgment

We are very grateful to the editors, and anonymous reviewers for their helpful comments and suggestions which improved the draft.

Author information

Authors and Affiliations

  1. School of Finance, Zhongnan University of Economics and Law, Wuhan, 430073, China

    Kishwar Ali

  2. School of International Trade and Economics, University of international Business and Economics, UIBE, Beijing, China

    Satar Bakhsh

  3. Management Sciences, SZABIST Karachi, Karachi, Pakistan

    Saif Ullah

  4. School of Management, Institute of Poverty Reduction and Development, Huazhong University of Science and Technology (HUST), Wuhan, China

    Atta Ullah

  5. School of Economics, Zhongnan University of Economics and Law, Wuhan, China

    Sami Ullah

Authors
  1. Kishwar Ali
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Satar Bakhsh
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Saif Ullah
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Atta Ullah
    View author publications

    You can also search for this author in PubMed Google Scholar

  5. Sami Ullah
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Atta Ullah.

Ethics declarations

Conflict of interests

The authors reported no potential conflict of interest with respect to the research, authorship, and/or publication of this article.

Additional information

Responsible Editor: Nicholas Apergis

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Ali, K., Bakhsh, S., Ullah, S. et al. Industrial growth and CO2 emissions in Vietnam: the key role of financial development and fossil fuel consumption. Environ Sci Pollut Res 28, 7515–7527 (2021). https://doi.org/10.1007/s11356-020-10996-6

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11356-020-10996-6

Keywords

Search

Navigation