Title: Investigating the foreign trade-emission nexus in RCEP

Authors: Nisha Prakash; Madhvi Sethi

Addresses: Symbiosis Institute of Business Management (SIBM), Symbiosis International (Deemed University) (SIU), Electronics City, Hosur Road, Bengaluru, Karnataka, India ' Symbiosis Institute of Business Management (SIBM), Symbiosis International (Deemed University) (SIU), Electronics City, Hosur Road, Bengaluru, Karnataka, India

Abstract: Foreign trade is usually considered a culprit for rising emissions. In this article, the authors attempt to understand whether the creation of the regional comprehensive economic partnership (RCEP) will lead to more emissions from the region. To meet this objective, the study analyses the relationship between foreign trade and carbon emissions of the 15 RCEP constituents, using macroeconomic data for the period 1991-2016. The long-term causal relationship between foreign trade and emissions was tested using the ARDL bounds test. The results indicate a long-run causal relationship between the two variables. A fully modified OLS regression model confirms that the three variables considered – foreign trade, economic growth, and energy consumption – have a significant, positive impact on emissions on RCEP member countries. The analysis of individual countries also confirms the cointegration between foreign trade and carbon emissions. ECMs further show the correction happens from foreign trade to carbon emissions.

Keywords: trade agreement; RCEP; emissions; foreign trade.

DOI: 10.1504/IJGE.2022.128932

International Journal of Green Economics, 2022 Vol.16 No.3, pp.219 - 234

Accepted: 29 Nov 2022
Published online: 10 Feb 2023 *

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