The greenhouse effect of the agriculture-economic growth-renewable energy nexus: Evidence from G20 countries

Abstract

Agriculture is the world's second largest greenhouse gas (GHG) emitter due to the use of fossil fuel-based fertilizers, agricultural machinery, and the burning of biomass. Meanwhile, the Group of Twenty (G20) countries, which include the world's top three agricultural markets, have a significant impact on world agricultural development. This study is the first attempt to examine the effects of the agriculture-economic growth-renewable energy nexus on carbon dioxide (CO2) emissions within the framework of the environmental Kuznets curve (EKC) in a panel of 19 nations of the G20 countries from 1990 to 2014. To do so, panel data unit root tests, cointegration tests, and the panel fully modified ordinary least squares (FMOLS) estimator are used. The main findings are as follows: (1) Panel data unit root and cointegration tests confirm the existence of a long-run relationship among the selected variables, (2) agriculture significantly increases CO2 emissions in the full sample and the developing economies of the G20, while renewable energy consumption reduces the CO2 emissions in the full sample and the developed economies of the G20, (3) the EKC indeed exists in the full sample and developed economies, while economic growth only exerts a positive impact on CO2 emissions for developing economies, indicating that the peak of CO2 emissions for developing economies has not yet been reached, and (4) varied causality links exist among the variables across the different income levels of the G20 countries. Based on the above findings, to suppress the greenhouse effect, the G20 countries' policymakers should not only promote the development of sustainable agriculture, but also stimulate renewable energy consumption, especially in developing economies.