Global effect of urban sprawl, industrialization, trade and economic development on carbon dioxide emissions

Abstract

Significant progress has been made towards mitigating climate change and its impacts across countries. However, the transboundary effect of CO₂ emissions means that excluding the actions and inactions of certain countries and territories that escalate emissions is alarming. On this note, we examined the heterogeneous contribution of immediate and underlying drivers of emissions across 206 countries and territories for the period spanning 1960–2018. We deployed a dynamic panel estimation technique that accounts for cross-sectional dependence, heterogeneous parameters across countries, and dynamic correlated effects—a constraint for socio-economic, consumption- and pollution-based models. A global accounting of economic policy and debt, population structure, density and urbanization, and environmental-related aggregate indicators in a carbon emission function is presented. The empirical results demonstrate that the overarching effect of the instantaneous increase in economic development, population dynamics and energy utilization stimulate global emissions at national, urban and household levels across countries and territories. Industrialization and trade were found to escalate global pollution levels due to the impact of carbonized and energy-intensive economic structure in many developing and developed economies. Urbanization, urban income growth, and urban energy consumption are intertwined, hence, the institution of urban-related policy interventions is likely to negate the trio-impact on environmental sustainability. The triple effect (exploitation of natural resources, production and consumption) of economic development spurs environmental pollution, thus, calls for structural change from a carbonized to a decarbonized economy. The complex interaction highlights diversification of the energy mix by the inclusion of clean and renewable energy sources, fossil fuel-switching, and modern technologies like carbon capture and storage to improve energy efficiency and decline emission intensities.