Dynamics between carbon emission, imported cultural goods, human capital, income, and energy consumption: renewed evidence from panel VAR approach

Abstract

Few studies have examined the link between the importation of cultural goods and carbon emission. With an emphasis on the driving forces of carbon emission, this paper constructs conventional panel vector autoregressive (PVAR) models to examine the dynamics between carbon emission, imported cultural goods, income, human capital, and energy consumption based on country-panel data of 158 countries or regions from 2004 to 2017. Through Granger causality tests, we find a unidirectional causality running from GDP per capita to energy consumption, from HDI to imported cultural goods, from imported cultural goods to carbon emission, and from imported cultural goods and energy consumption for Annex I countries. As for non-Annex-I countries, energy consumption is the Granger cause of GDP per capita, while HDI has a bidirectional causality with GDP per capita. Through impulse response functions, we find that energy consumption and GDP per capita have significantly positive impacts on carbon emission within the shorter period for non-Annex-I countries than for Annex-I countries. In the same pattern, imported cultural goods have significantly negative impacts on carbon emission. Our variance decomposition results showed that the largest variation in carbon emission can be explained by its own shock for both non-Annex-I countries and Annex-I countries, while the carbon emission of Annex-I countries showed a stronger path dependence than non-Annex-I countries.

Keywords: Carbon emission; Energy consumption; Imported cultural goods; Impulse response; Panel VAR.