Urbanization, openness, emissions, and energy intensity: A study of increasingly urbanized emerging economies

Abstract

This paper analyses the impact of urbanization and trade openness on emissions and energy intensity in twenty-two increasingly urbanized emerging economies. We employ three second-generation heterogeneous linear panel models as well as recently developed nonlinear panel estimation techniques allowing for cross-sectional dependence. The empirical results show that population density and affluence increase emissions and energy intensity while renewable energy seems to be dormant in these emerging economies, but non-renewable energy increases both CO2 emissions and energy intensity. In addition, openness significantly reduces both pollutant emissions and energy intensity whereas urbanization significantly increases energy intensity, but it is insignificant in increasing emissions. This may be, in part, due to the recent increasing trend in adopting cleaner technologies in these increasingly urbanized developing economies.