Study on the long-term impact of economic globalization and population aging on CO₂ emissions in OECD countries

Both economic globalization and population aging have given rise to changes in environmental quality, but the research that integrates these two crucial factors into the same environment policy framework is still a blank. Therefore, using panel data of the Organization for Economic Cooperation and Development (OECD) over the period 1971-2016, this study examines the long-term impact of economic globalization and population aging on CO₂ emissions. First, second-generation panel regression approaches are employed to verify the panel data, including unit root tests, cointegration tests and causality tests. Next, Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) are respectively used for empirical analysis of the long-term impact between variables. The augmented mean group (AMG) is also applied to ascertain the robustness results of the estimation coefficients. Finally, using Dumitrescu and Hurlin non-causality test to examine the causal associations between variables to avoid the contingency of the results. The overall results show that economic globalization and population aging decrease the long-term CO₂ emissions. The inverted U-shaped relationship between economic growth and environmental pollution confirms the effectiveness of the Environmental Kuznets Curve (EKC) in OECD countries. In addition, unidirectional causal relationships have been found from economic globalization and population aging to CO₂ emissions in this study. Policy suggestions in response to these findings are discussed.