Dynamic and causality interrelationships from municipal solid waste recycling to economic growth, carbon emissions and energy efficiency using a novel bootstrapping autoregressive distributed lag

Abstract

This study contributes to estimate the municipal solid waste (MSW) recycling effect on environmental quality and economic growth in the United States. Few studies have been given to macro-level aggregate analysis through national scale MSW recycling, environmental, and economic indicators. This study employs bootstrapping autoregressive distributed lag modeling for investigating the cointegration relationship among MSW recycling, economic growth, carbon emissions , and energy efficiency utilized quarterly data from 1990 to 2017. The result implies that a one percent increase in MSW recycling contributes to economic growth and reduce carbon emissions by 0.317% (0.157%) and 0.209% (0.087%) in the long-run (short-run). Similarly, a one percent improvement in energy efficiency stimulates economic growth by 0.489% (0.281%) and mitigates carbon emissions by 0.285% (0.197%) in the long-run (short-run). A higher per capita income and population growth caused higher emissions by 0.197% and 0.401% in the long-run. The overall results reveal stronger impacts in the long-run than the short-run with significant convergence towards long-run equilibrium, suggesting a prominent long-run transmission of economic and environmental fallouts. This study confirms a uni-directional causality from MSW recycling to economic growth, carbon emissions, and energy efficiency. These outcomes signify that any policy intervention related to MSW recycling produces significant changes in the level of economic growth and carbon emissions. The finding provides valuable insight for policymakers to counteract carbon emissions through recyclable waste management that simultaneously create significant economic value.