CO2 Emissions and Macroeconomic Indicators: Analysis of the Most Polluted Regions in the World

Abstract

There is no sector of the economy that is not dependent on the state of development of the energy sector. This sector produces a significant share of global CO2 emissions. Harmful CO2 emissions and greenhouse gas emissions accelerate global warming. Therefore, more and more countries are adopting a strategy for the transition to carbon-neutral energy. However, energy independence and economic competitiveness are closely linked. One cannot analyze them separately. Given these facts, we focused on conducting an econometric study of the impact of key macroeconomic indicators on the level of CO2 emissions into the air in the United States and the Asia-Pacific region as the regions with the largest CO2 emissions. The modeling was carried out using the method of a correlation–regression analysis with the subsequent construction of econometric models. The quality of the built econometric models was checked using the coefficient of determination and Fisher’s criterion. The sample of statistics was formed from all the available values of the World Bank’s annual indicators for the period 1970–2020. The findings achieved showed that: (i) The results of our study confirmed the dependence of CO2 emissions on macroeconomic factors such as GDP, exports and imports, the rate of inflation, and unemployment. It allows the governments of many countries to use research findings to diagnose, monitor, and forecast macroeconomic outcomes to reduce or maintain allowable CO2 emissions. (ii) Identifying and assessing economic losses from environmental pollution by CO2 emissions using econometric models will allow to ensure effective public environmental and economic policies aimed at reducing harmful CO2 emissions into the air. It may be regarded as the practical importance of our study.