Combustible renewables and waste consumption, agriculture, CO2 emissions and economic growth in Brazil

Ben Jebli, Mehdi and Ben Youssef, Slim (2016): Combustible renewables and waste consumption, agriculture, CO2 emissions and economic growth in Brazil.

Abstract

This paper employs the autoregressive distributed lag (ARDL) approach and Granger causality tests to examine the dynamic causal links between per capita combustible renewables and waste (CRW) consumption, agricultural value added (AVA), carbon dioxide (CO2) emissions, and real gross domestic product (GDP) for the case of Brazil, spanning the period 1980-2011. The Fisher statistic of the Wald test confirms the existence of long-run cointegration between the considered variables. Short-run empirical findings reveal that there is a unidirectional causality running from agriculture to CO2 emissions and to GDP. However, there is long-run bidirectional causality between all considered variables. The ARDL long-run estimates show that both CRW consumption and AVA contribute to increase economic growth and to decrease CO2 emissions. Agricultural production and CRW consumption seem to play substitutable roles in the Brazilian economy as increasing CRW consumption reduces AVA in the long-run, and vice versa. In addition, economic growth increases agricultural production at the expense of CRW production. We recommend that Brazil should continue to encourage agricultural and biofuels productions. The actual substitutability between agricultural and biofuels production should be reduced or even stopped by encouraging second-generation biofuels and discouraging first-generation biofuels. This may be done by policies of subsidization or taxation, encouraging R&D, and giving competitive credits.

• Item Type: MPRA Paper
• Language: English
• Keywords: Autoregressive distributed lag; Granger causality; combustible renewables and waste; agricultural value added; Brazil.
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary Products; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O54 - Latin America ; Caribbean; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q42 - Alternative Energy Sources; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming

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