Temperature and environmental degradation: an international evidence

Abstract

ABSTRACT Introduction The effects of temperature have largely been under-examined in climate change studies. This study examines both direct and indirect effects of temperature on environmental degradation using the sample of 103 middle-income countries from 1985 to 2019. Unlike previous studies in which a single equation approach is utilized, our study considers the simultaneous equations modelling to examine the energy-growth-environment nexus incorporating temperature and corruption. The difference and system generalized method of moments estimations for panel data are used. Outcomes Empirical results from this paper confirm both the direct and indirect effects (via energy consumption) of temperature on environmental degradation. We find corruption harms economic growth in middle-income countries. The continued use of fossil fuel energy in energy consumption deteriorates environmental quality. Our findings confirm the critical role of the services sector in supporting economic growth and reducing emerging consumption, leading to increased environmental quality. Conclusion Findings from our study reconfirm the vital role of renewable energy and its extended use in achieving dual objectives of supporting economic growth and improving the environmental quality in middle-income countries.