The dynamic links between CO2 emissions, energy consumption and economic development in the countries along "the Belt and Road"

Highlights: • The nexus of CO₂ emissions and GDP is reinvestigated using a specific dataset. • The countries/regions along China's "the Belt and Road" initiative are examined. • The vector correction model, fully modified OLS and dynamic OLS approaches are employed. • Long−run bidirectional causalities between CO₂ emissions, energy use and GDP exit. • Renewable energy contributes to long−run growth in the energy−importing countries. China has proposed the Belt and Road Initiative to promote the cooperation of energy production and trade between the relevant countries. This paper investigates the relationship between the energy consumption and economic growth of the countries along the Belt and Road using a panel of data for 69 countries during the period between 1970 and 2013. Both of the renewable and traditional fossil energy consumptions are investigated in this study. By employing vector error correction model (VECM), fully modified OLS (FMOLS) and dynamic OLS (DOLS) approaches, the estimation results indicate that the nexuses of the energy consumption and economic developments vary across different subgroups. For the entire group, there is evidence of long−run bidirectional causalities among carbon emissions, energy use, industry value added and GDP per capita. For the energy−importing countries along the Belt and Road, there exists unidirectional short−run causality running from GDP to renewable energy and long−run causality in the reverse direction. In contrast, for the energy−exporting countries, there is a bidirectional causality between the energy use and GDP per capita in the long run. These findings suggest significant cooperation potential in the economies and trades of China and the Belt and Road countries.