A time-frequency analysis of trade openness and CO₂ emissions in France

Highlights: • Exploring the interaction between globalization and CO₂ emissions in France 1960–2013 by using the wavelet tool. • The data-set covers the period 1960–2013. • There is a lead-lag nexus between variables under cyclical and anti-cyclical shocks. • The effects are propagated at different sub-periods of time and frequencies. - Abstract: The paper explores the comovement between trade openness and carbon dioxide (CO₂) emissions in France, over the period 1960–2013 by using the wavelet tool. The investigation offers detailed information about this interaction, for different sub-periods of time and frequencies. It also reveals the lead-lag nexus between variables under cyclical and anti-cyclical shocks. The main findings reveal no comovement at high frequency between trade openness and gas emissions, confirming the 'neutral hypothesis' on short term. The CO₂ emissions positively drive the trade openness at medium frequency. Hence, on medium term, the inexistence of strong environmental rules stimulate the international trade, especially the exports obtained based on 'pollutant capacities'. Curiously, the trade openness positively runs the gas emissions at low frequency. Herein, on long term, the interaction between trade and CO₂ emissions is driven by the business cycle.