Evaluating the relationship among agriculture, energy demand, finance and environmental degradation in one belt and one road economies

Abstract

The agriculture sector has a 21 percent share in global CO2 emission. It is contributing the 40 percent share in the gross domestic product of OBORI (One Belt and One Road Initiative) economies. Therefore, the present work intends to evaluate the role of agriculture and forest on environmental degradation from 1980 to 2017 for OBORI economies. The cross-sectional dependence, and order of integration are checked by cross-sectional dependence and second-generation panel unit roots tests respectively. Afterwards, the Wester-Lund co-integration test infers the existence of co-integration between under-considered variables for OBORI region. The empirical results from Fully Modified Ordinary Least Square (FMOLS) and Dynamic Ordinary Least Square (DOLS) suggest that agriculture and energy demand cause to upsurge the environmental degradation. While, the forest is improving the environment quality. The authorities may consider the efficient energy utilizing, and eco-friendly techniques to overcome the deteriorating effects of energy usage and agriculture on environment respectively. The heterogeneous panel causality test infers a bidirectional causality between environmental degradation, finance, agriculture, and energy demand respectively.

Keywords

• environmental degradation
• energy demand
• agriculture
• forest
• finance
• one belt and one road initiative