Environmental deterioration in the age of industrialization and production: do industrial competition and renewable energy reduce the ecological burden?

Abstract

The modern era of globalization, economic development, and increase in manufacturing activity pose severe risks to the natural environment. In this context, industries must prioritize sustainable economic growth and development. Thus, the purpose of this study is to provide insight into industrial competition, renewable energy, economic freedom, manufacturing value added, economic growth, and carbon dioxide emissions (CO₂ emissions) in the top ten high-income countries from 1997 to 2019. The results from panel cross-sectional autoregressive distributed lag (CS-ARDL), augmented mean group (AMG), and common correlated effects mean group (CCEMG) techniques revealed that economic growth and industrial production have a harmful influence on CO₂ emissions. Meanwhile, industrial competitiveness, renewable energy, and economic freedom are all negatively associated with CO₂ emissions. This specifies that industrial competitiveness, renewable energy, and economic freedom are favorably related to environmental sustainability by limiting CO₂ emissions in the top ten high-income countries. These findings imply that governments and responsible authorities/policymakers develop strategies to reduce the environmental impact of manufacturing value addition and economic growth in the top ten high-income countries and allocate more financial resources to renewable energy and promote industrial competition.

Keywords: CO2 emissions; CS-ARDL; Economic freedom; Industrial competition; Manufacturing value added; Renewable energy.