Influence of Economic Growth and Transport on Carbon Emissions Across Different Income Groups

Abstract

The purpose of this article is to examine how energy consumption and freight transport influence CO2 emissions across a sample of 65 countries from 2000 to 2019. To ensure a more uniform panel data analysis, the study categorizes the data into three sub-panels: high-income, middle-income, and low-income countries. These categorizations are based on the countries' income levels. By employing the generalized method of moments for analysis, the study reveals that energy consumption significantly and positively affects CO2 emissions. Similarly, the impact of freight transport on CO2 emissions is also positive and significant, with a particularly pronounced effect in high-income countries. Additionally, the study finds that other factors, such as economic growth, also significantly influence carbon emissions. These results underscore the urgent need for adopting new concepts like sustainable development, sustainable transport, and energy efficiency. These policies are seen as essential to combating the severe environmental degradation we face today. The analysis confirms that increased energy consumption directly correlates with higher CO2 emissions, a trend consistent across different income levels of countries. High-income countries, due to their advanced industrial activities and extensive freight transport networks, exhibit a more substantial impact on emissions from freight transport. Middle-income and low-income countries, while also showing significant effects, differ in the extent due to varying levels of industrialization and transport infrastructure.  Economic growth emerges as another critical factor influencing CO2 emissions. As countries develop economically, their energy demands and freight transport activities increase, leading to higher emissions. This finding aligns with the Environmental Kuznets Curve hypothesis, which suggests that as an economy grows, environmental degradation increases up to a point before starting to decline as more sustainable practices are adopted. The study’s findings emphasize the importance of sustainable practices in mitigating environmental harm. Concepts such as sustainable development advocate for balancing economic growth with environmental preservation. Sustainable transport focuses on reducing the carbon footprint of freight transport through innovations in logistics and vehicle efficiency. Energy efficiency, on the other hand, aims to reduce energy consumption through technological advancements and better energy management practices. These sustainable practices are not just theoretical concepts but are being implemented globally. Countries are increasingly investing in renewable energy sources, improving public transportation systems, and adopting stricter regulations on emissions. The study suggests that such policies are not only beneficial but necessary to curb the adverse effects of energy consumption and freight transport on the environment.