Nexus between urbanization, emission, openness, and energy intensity: panel study across income groups

Energy is a basic need for the fulfillment of human activities, and usage of energy causes a rise in the carbon emission levels. This paper examines the impact of trade openness, urbanization, imports and exports on carbon emission, and energy intensity for 192 countries from higher, upper-middle, lower-middle, and low-income groups. The data are taken from the year 1990 to 2017 and Generalized method of moments (GMM) is applied for the empirical analyses. Results showed that energy use has less impact on carbon emission in high-income and lower-middle-income economies as compared to the other three sub-panels. Likewise, as a whole, urbanization showed inverse association with emission, on the other hand, it showed positive association with energy intensity in the high-income group. Trade openness showed a positive and highly significant influence on emission as well as on energy intensity. Exports and imports exposed different relations with carbon emission and energy intensity. Outcomes of a Granger causality test yielded an indication of varied causality associations between the variables across the income-based sub-panels. The study suggested the need for improvement in technologies and facilities across the countries for the decline of carbon emission and the enhancement of energy intensity.