Environmental Pollution and Economic Sentiments: Any Correlation and Causal Relation So Far for World's Highly Polluting Countries?

Abstract

It is an established document at the global level that more environmental pollution is associated with more growth of the output for some economies, and on the other hand, more pollution is associated with low growth of output in some other economies. Having the scenario of massive climate change, the global policymakers have been experimenting with drastic reductions in the use of energy and fossil fuels within the target year on 2030 for some countries and 2050 for other countries. The negative impacts of the environmental pollution and the pollution abating targets influence the decision-making processes of the households and business houses around the world. There is thus a potential nexus between the emissions of different greenhouse gases (GHGs) and consumers' and business sentiments in taking optimum decisions. Under this background, this chapter aims to investigate whether GHG emissions and consumers' and business sentiments have any association and interplays for the period 1998–2019 using appropriate econometric exercises. The correlation shows positive results with consumers' sentiments in some developing countries but negative results with business sentiments in some developed countries. Further, there are long-run relationships of GHG with consumers' sentiments and business sentiments in some countries with the mixed results of causal interplays.

Citation

Dey, M., Bhukta, S. and Das, R.C. (2023), "Environmental Pollution and Economic Sentiments: Any Correlation and Causal Relation So Far for World's Highly Polluting Countries?", Dinçer, H. and Yüksel, S. (Ed.) Renewable Energy Investments for Sustainable Business Projects, Emerald Publishing Limited, Leeds, pp. 99-111. https://doi.org/10.1108/978-1-80382-883-120231008