It can be said that the individual most urgent planetary issue today is the event of clime alteration or the at hand loom of planetary heating. This has become the subject of assorted scientific, academic, political, and economic communities today. Former American presidential campaigner Al Gore even produced a movie entitled “ An Inconvenient Truth ” , exposing to the universe the acrimonious worlds of the causes and deductions of clime alteration. In truth, if left unabated, climate alteration will radically raise the Earth ‘s planetary mean temperature, changing ecosystems, raising sea degrees, and impacting 1000000s of people ‘s lives throughout the universe.
One major cause of clime alteration is the stock-up of nursery gas emanations that build up in the Earth ‘s ambiance and pin down the Sun ‘s radiations, thereby increasing the Earth ‘s temperature. One nursery gas that contributes the largest per centum of entire nursery gas emanations is carbon dioxide or CO2. There is a demand to turn to CO2 emanations because non merely does it consist bulk of emanations but it is besides steadily increasing as a consequence of the increasing usage of fossil fuels, deforestation and population growing in the universe. Because CO2 emanations pose the greatest menace to climate alteration and compose bulk of nursery gas emanations, this paper will concentrate on the different variables that affect CO2 emanations.
Several old surveies have already implemented the same analysis concentrating on break uping CO2 emanations and tracking down its beginnings. Among the surveies, similar factors are identified likewise as determiners of CO2 emanations, such as population growing and size, income or GDP, energy strength, and C strength. For the intent of this paper, we apply the panel informations arrested development method in gauging the consequences of the determiners of CO2 emanations in the six ASEAN states from 1980 to 2008.
Review of Related Literature
One of the most recent homo and natural phenomena blighting the universe today is the event of clime alteration. Today, clime alteration has become one of the most at hand and pressing planetary issues that concern non merely some sectors and societies, but the full world. Pant ( 2009 ) provinces in her article on the effects of agribusiness on clime alteration that “ clime is realized as the greatest menace to living existences on the Earth. ” Simply put, clime alteration is the addition in the overall average temperature of the universe caused by a alteration in the composing of planetary ambiance. Harmonizing to the Intergovernmental Panel on Climate Change or IPCC, a organic structure of international experts founded in 1988 that creates appraisals of clime alteration based on comprehensive scientific and proficient research, “ heating of the clime system is univocal, as is now apparent from observations of additions in planetary mean air and ocean temperatures, widespread thaw of snow and ice and lifting planetary mean sea degree ” ( Bernstein, Bosch, et. al. , 2007 ) .
Prior to the Industrial epoch, the overall addition in planetary average temperature was simply half a degree centigrade ( Chakeredza, Temu, et. al. , 2009 ) . The alteration in composing of the Earth ‘s ambiance is caused majorly by the lifting degrees of nursery gas concentrations in the Earth ‘s ambiance, viz. C dioxide ( CO2 ) , methane ( CH4 ) , azotic oxide ( N2O ) , chloro- and fluoro-carbons and other industrial gases. This rush in nursery gases traps the Sun ‘s radiation in the ambiance and causes planetary temperatures to increase, changing the planetary energy budget of the Earth and falsifying bing natural systems. Chakeredza, Temu, et. Al. ( 2009 ) predict that in 2035, if the universe continues at the rate and degree of industrial activity it is runing at now, there would be an overall addition of 2A°C in the mean planetary temperature, ensuing in significant alteration of natural ecosystems and an addition in the universe ‘s sea-level that will impact all coastal zones throughout the universe. This is based on the belief that clime alteration is a semisynthetic phenomenon and non a consequence of natural factors.
There is an bing argument in the academic community between whether clime alteration is caused by man-made or natural factors. The theory more accepted by the populace is the semisynthetic theory on clime alteration, with support from academic organic structures in the planetary community, such as the Intergovernmental Panel on Climate Change or IPCC. The IPCC ‘s function is to reexamine world-wide research and stand for the unpolitical planetary scientific consensus in let go ofing regular appraisal studies. Their Synthesis Report of the Fourth Assessment Report ( AR4 ) released in 2007 province that “ planetary GHG emanations due to human activities have grown since pre-industrial times, with an addition of 70 % between 1970 and 2004 ” ( Bernstein, Bosch, et. al. , 2007 ) . Norcia ( 2008 ) concludes that worlds are the cause of planetary heating, saying IPCC surveies that show that recent human usage of fossil fuels “ have generated over 130 times the sum of CO2 emitted by vents and solar flairs ” .
On the other manus, Dr. Nicola Scaffeta ( 2009 ) argues that the IPCC came to the deceptive decision that worlds are the cause of the rush in planetary heating due to its failure to demo climate variableness before 1960 in its clime theoretical accounts. Besides, Scaffeta ( 2009 ) proves that there were in fact two similar planetary heating periods in the last twentieth century, during the periods of 1910 to 1940 and 1970 to 2000 ; that pre-industrial clime changed significantly before the 1900s and that entire solar irradiance probably rose between 1970 and 2000. Scaffeta ‘s surveies support the decision that the anomalous planetary heating observed in recent decennaries is non semisynthetic but a natural phenomenon repeating throughout centuries.
The recent rush in planetary heating is due to the big stock of nursery gas emanations in the Earth ‘s atmosphere ensuing from human activity since the Industrial Revolution. Anthropogenic warming increased by 70 % from 1970 to 2004, while the degree of CO2 in the ambiance increased by averagely 35 % during the period 1750 to 2005, from 280 parts per million to around 380 parts per million ( Bernstein, Bosch, et. al. , 2007 ) . Harmonizing to Karakaya, Ozcag, et. Al ( 2005 ) , the emanation of CO2 is the most urgent issue because it composes the largest per centum of entire nursery gas emanations and is continually increasing unlike the other nursery gas emanations, viz. methane ( CH4 ) , azotic oxide ( N2O ) and three classs of fluorinated gases ( HFCs, PFCS and SF6 ) , which are diminishing. Global CO2 emanations were recorded at 8.38 gigatons in 2006, which is 20 per centum greater than the recorded degree in 2000. Between the period 2000 to 2006, recorded CO2 emanations was at 3.1 % per twelvemonth, which is more than twice the rate of growing during the 1900s ( Moore, 2008 ) .
Majority of the addition in nursery gas emanations is caused by the usage of fossil fuels, energy supply, transit and industries, while agribusiness, land usage, forestry, and commercial and residential edifices besides contribute to the growing of emanations albeit at a lower per centum. It should still be noted nevertheless, that the degree of nursery gas emanations vary with per capita income, population, industry and energy emanations across states ( Bernstein, Bosch, et. al. , 2007 ) . Datas from the United Nations Framework Convention on Climate Change shows that Annex I states, or first-world developed states, compose 20 % of the universe ‘s population, produce 57 % of the universe ‘s gross domestic merchandise ( GDP ) based on buying power para ( PPP ) , and breathe a sum of 46 % of planetary nursery gas emanations. This information proves that there exists a direct correlativity between highly-industrialized states and anthropogenetic nursery gas emanations.
A figure of writers and academicians have searched for ways to track the beginnings of CO2 emanations growing. Among these include Hamilton and Turton ( 2000 ) , who utilized the decomposition methodological analysis to insulate the population growing consequence, the GDP per capita consequence, and the consequence of energy, economic and demographic variables in the analysis of full economic systems. In their paper, they decomposed energy-related emanations of CO2 for a given twelvemonth in an economic system into the undermentioned variables: CO2 strength consequence or the strength of CO2 in fossil fuel burning, fossil fuel-intensity consequence or the proportion of entire energy obtained from fossil beginnings, conversion-efficiency trial or the sum of primary energy required to present energy for concluding ingestion, energy-intensity consequence or the energy strength of economic end product as a consequence of economic construction and efficiency of energy usage, growing consequence or economic end product per capita, and eventually, population growing ( Hamilton & A ; Turton, 2000 ) . In similar documents by Karakaya and Ozcag ( 2005 ) , they besides identify CO2 emanations as a map of population, income ( GDP per capita ) , energy strength ( units of energy/GDP ) and C strength ( CO2 emanations per unit of energy ) . Because these surveies likewise identify population, economic growing, and other factors as relevant in the emanation of CO2 emanations, it is necessary to analyze these driving factors more closely.
It is widely believed that the recent rush in the emanation of nursery gases is mostly due to anthropogenetic or human activity. This supports the hypothesis that population size contributes to the emanation of CO2. Because each individual in a population has basic demands such as nutrient, H2O, vesture, shelter, etc. , it follows that with a greater the figure of people, there is greater demand on energy ( Shi, 2001 ) . Population size consequences in an increased demand for energy, electricity, power, wood for fuel, industries, and transit, ensuing in a larger usage of fossil fuels and greater deforestation. Besides, a larger population causes larger alterations in land usage and alteration, such as for commercial and residential usage ( Karakaya & A ; Ozcag, 2005 ) .
One of the cardinal theoretical models associated with the determiners of environmental impact is the IPAT theoretical account of Ehrlich and Holdren ( 1972 ) . This theoretical account states that the impact of a group or state on the environment is affected by population size ( P ) , per capita richness ( A ) in footings of existent per capita GDP to denote the handiness of goods and services, and engineering related to each unit of ingestion ( T ) . In a similar econometric survey done by Shi ( 2001 ) , he concludes that one per centum of population growing consequences in a 1.28 addition in mean CO2 emanations, the consequence of population on emanations is more outstanding in developed instead than developing states, that in 2025, estimated planetary emanation will top out at an all-time high of 13.72 gigatons under the business-as-usual premises ( one-year population growing rate under the UN medium growing scenario and one-year existent GDP per capita growing rate of 1.9 % ) , and that a monotonically upward displacement in emanations is associated with increasing income degrees. Unlu ( 2008 ) besides concludes that the consequence population on C emanations are greater developed than in developing states. Therefore, there is bing research and cogent evidence in the academic community to back up the hypothesis that population size and growing affects the degree of CO2 emanations.
Stretesky and Lynch ‘s article entitled “ A cross-national survey of the association between per capita C dioxide emanations and exports to the United States ” ( 2009 ) discussed the different economic factors that may impact production of CO2. One of them is the Gross Domestic Product of a state, which is the entire market value of the goods and services produced in a state in a given twelvemonth. This paper besides suggests that states with better economic systems and greater productiveness create larger sums of pollution, as besides concluded by Unlu ( 2008 ) .
In add-on, another survey by Lean and Smyth ( 2009 ) examines the relationship of CO2 emanations, electricity ingestion and economic growing. The Environmental Kuznets Curve ( EKC ) hypothesis provinces that as income additions, emanations addition every bit good, until such point that it reaches a threshold degree. Emissions occur from the production procedure, and the more goods are produced, the more income people have, and the more C dioxide is emitted. Because the income of a state is its gross domestic merchandise or GDP, therefore there exists grounds to reason that GDP is positively related to the C emanations.
Harmonizing to Azomahoua, Goedhuysa, and Nguyen-Van ( 2009 ) , income has a important consequence on CO2 emanations for low income degrees. However, there is a turning point when GDP reaches $ 16,500 USD per capita, this positive relationship turns negative. This behavior possibly is possibly what differentiates the ability of rich developed states to fund extenuation and clime alteration bar steps, but poorer developing states do non hold the support to set their production processes to do it more efficient. Although this may be true, the consequences for this income threshold were statistically undistinguished. In decision, the writers province that CO2 emanations clearly increase with income during low income degrees, but lessening insignificantly in high income degrees. This lone contributes grounds to the hypothesis that GDP affects C dioxide emanation.
Aside from GDP, another identified determiner of CO2 emanations is energy ingestion. In a survey by Lean and Smyth ( 2009 ) , they identify the primary cause of emanations as the combustion and usage of fossil fuels. The combustion of fossil fuels is done through the ingestion of energy resources such as oil, coal and gas. In order to bring forth energy for power and to fire fossil fuels, states consume rough oil. Therefore, the sum of oil a state uses determines the sum of fossil fuels they utilize and consume. In order to battle the coming of a clime alteration, it is inevitable to cut down the ingestion of fossil fuels. Therefore, in measuring the beginnings of CO2 emanations, it is of import to find the extent and magnitude of how ingestion of oil contributes to climate alteration ( AESR Briefing, 2003 ) . Research by Stretesky and Lynch ( 2009 ) sum up that a important proportion of CO2 emanations comes from automotive transit while informations from US Department of Energy ‘s Carbon Dioxide Analysis Center cites bulk of CO2 emanations from fossil fuel combustion. With this cognition, worlds can break measure the root causes of nursery gas emanations and contribute to the undertaking of happening solutions to extenuate clime alteration.
The factors of CO2 emanations antecedently discussed were those commonly identified within the academic community as determiners of nursery gas emanations. Although non antecedently cited in bing empirical surveies, one factor that could impact CO2 emanations is the per centum of agricultural and industrial activities in the entire GDP of different states. Existing literature attributes the rush in nursery gas emanations to the event of the Industrial Era, wherein the human usage of fossil fuel greatly increased and big industries that utilized energy and fossil fuels, necessitating deforestation, were born. Despite industrial activities being the major cause of nursery gas emanations, agricultural activities have contributed every bit good to emanations, albeit at a smaller rate. Azotic oxide is emitted in the agribusiness sector through dirt and manure direction, enteral agitation and dodo fuel ingestions, accounting for approximately 60 per centum of entire azotic oxide emanations, while C dioxide is emitted from fossil fuel ingestion in agricultural production ( Pant, 2009 ) . Jiang ( 2009 ) attributes both industrialisation and additions in energy-use in agribusiness to urbanisation, which is defined as “ a procedure of population concentration, a reorganisation of economic activities, and a alteration in the societal values and behavior of people. ” However, despite lending to carbon dioxide emanation, a survey by Pant ( 2009 ) shows that states with larger countries of land for agribusiness and forestry usage emit less C per capita than states with smaller proportions of land under agribusiness and forestry. Besides, agriculture-dominated states whose GDP are mostly generated by agricultural industries and endeavors by and large require less fossil fuels, therefore making a more climate-friendly state than states whose GDP ‘s are mostly generated by industrial activities.
Certain agricultural patterns besides mitigate the emanation of C, such as irrigation and dependence on bio-mass fuel, countervailing patterns that addition emanations, such as the usage of fertilisers. Overall, the reductive impact of agribusiness on C emanations is greater than the conducive impact. Certain agrarian patterns today can be employed in order to pull strings agribusiness towards extenuation of clime alteration. Among the patterns that should be emphasized are low external input agribusiness such as organic agriculture, and the purchase of organic merchandises from less developed states by people in high-income states in order to advance such patterns and cut down emanations through necessitating high-income states to pay for higher emanation of nursery gases ( Pant, 2009 ) . All of these grounds point to the decision that agricultural states contribute less to CO2 emanations than industrial states, as determined by the industry ‘s per centum of part to a state ‘s overall GDP.
As discussed in the reappraisal of related literature, the job of impending clime alteration is mostly due to the increasing C dioxide emanations today. Existing surveies have sought to work out the job of CO2 emanations through tracking the different beginnings and gauging precisely the magnitude of each factor. In this paper, we use a panel information set of variables of C dioxide emanations for six ASEAN states, viz. Philippines, Singapore, Malaysia, Thailand, Brunei and Indonesia from the old ages 1980 to 2008. This panel information set was gathered through pull outing information from different databases and believable online statistical beginnings and stacked cross-sectional. To gauge the consequences, we utilize a panel information arrested development theoretical account in order to capture the effects of our explanatory variables on the dependant variable.
The panel informations set consists of states included in the ASEAN-6 ( Philippines, Thailand, Malaysia, Indonesia, Brunei and Singapore ) crossing from the twelvemonth 1980 up to the twelvemonth 2008. The clip period was intentionally designed to be recent, seasonably and within the past few decennaries because clime alteration began to billow around 20 old ages ago, and is still go oning to increase today. Therefore, we deemed it of import to capture the effects from around the clip of the rush in emanations up until today, while maintaining the clip period of 29 old ages long plenty to besides capture long-run effects. This paper focuses on ASEAN states in covering with C dioxide emanations because of the timely being of the ASEAN VISION 2020, or the motion into regional cooperation towards the maximization and efficient use of resources. This motion has resulted in the ASEAN states increasing their industrial productiveness and efficiency of procedures in order to maximise their resources, thereby bring forthing more pollution and breathing more CO2. Harmonizing to the ASEAN secretariat, this is one issue that needs to be addressed. In order to place solutions towards extenuating nursery gas emanations in the ASEAN states, it is first necessary to measure and analyze the several CO2 parts in the different states, every bit good as the factors that affect this. Therefore, it is of import to analyze the relationship of C dioxide emanations in the ASEAN states ( Lean & A ; Smyth, 2009 ) .
Although the paper highlights the ASEAN states, the focal point is merely on the ASEAN-6 states, sole of the CLMV ( Cambodia, Laos, Myanmar and Vietnam ) . The principle behind this is that the CLMV states have different rates of economic growing that are well lower compared with the ASEAN-6 states. The CLMV are the four newer member states of the ASEAN and therefore, are still really developing, with economic positions really different from the remainder of their neighbouring ASEAN states. It is our belief that the broad economic disparity of the CLMV states with the ASEAN-6 states could hold distorted the consequences and possibly resulted in certain variables going insignificant. Therefore, we deemed it safer to restrict the population sample to the ASEAN-6 states.
The dependant variable for our theoretical account is the sum of C dioxide emanation, which is a step of the degree of CO2 being emitted in a certain state measured in metric dozenss. We use CO2 emanations as our dependant variable because it is one of the major factors of the increasing temperature around the universe ( Bernstein, Bosch, et. al. , 2007 ) . With CO2 emanations as the dependant variable, the explanatory variables and their a priori outlooks are summarized in the undermentioned tabular array:
Size of the population of the state
gross domestic product
Nominal GDP of state in 1000000s of current US $
Agricultural part of a state ‘s entire GDP in per centum
Daily use of rough oil in the state in 1000s
of barrels per twenty-four hours
One factor that would impact the sum of C dioxide emanations is the size of a state ‘s population. The a priori outlook on population is positive because based on the old treatment of bing literature, there is grounds to back up the theory that as population additions there is a corresponding addition in the usage of fossil fuels, and accordingly, in the sum of CO2 emanations. Harmonizing to Shi ( 2001 ) , the more people there are, the higher the demand is on energy. Therefore, as more energy is being used, the more C dioxide is being emitted.
The 2nd factor is GDP, or the nominal gross domestic merchandise of a state in 1000000s of current US $ dollars. The a priori outlook is besides positive because similar to population, it can be anticipate that every bit income additions, the sum of emanations would besides lift. This is based on the Environmental Kuznets Curve ( EKC ) hypothesis earlier discussed which states that emanations result from the production procedure, which consequences in more goods being produced, which generates more income thereby increasing GDP. Furthermore, a higher GDP means a better economic system and harmonizing to Stretesky and Lynch ( 2009 ) , states with better economic systems and higher productiveness emit more pollution. Therefore, the relationship between income and GDP can be tied straight to a higher degree of CO2 emanation.
The 3rd factor is the part of agribusiness in a state ‘s entire GDP in per centum. The a priori outlook of this variable is negative because bing literature attributes bulk of the addition in nursery gas emanations to industrial activities, which spiked during the Industrial Era. In a research by Pant ( 2009 ) , it is concluded that states with larger countries of land for agribusiness and forestry usage as compared to countries used for industrial activities emit less C per capita. Therefore, it follows that states whose GDP are mostly composed of agricultural activities produce less CO2 than states whose GDP are driven by industrial activities.
Last, the 4th factor is the day-to-day use of rough oil in the state in 1000s of barrels per twenty-four hours. The a priori outlook for this variable is besides positive because it can be expected that with the sum of oil ingestion used for the combustion of fossil fuels, the sum of C dioxide emissions additions every bit good. Lean and Smyth ‘s ( 2009 ) research support the determination that emanations are chiefly generated through the combustion of fossil fuels, which consumes oil. Therefore, as the ingestion of oil additions, measured by the figure of barrels a state uses per twenty-four hours, CO2 emissions correspondingly addition.
General Model and Data
The aim of this paper is to find what factors affect the CO2 emanations of the ASEAN-6 states over the clip period 1980 to 2008. The information set to be used is a panel information set with the following general theoretical account:
co2= I?0 + I?1population + I?2gdp + I?3agricultureofgdp + I?4oilbarrel + U ( Eq. 1.1 )
carbon dioxide = C emanation in metric dozenss
population = population of different states
gross domestic product = GDP of states in 1000000s of ( current us dollars )
agricultureofgdp = agribusiness part of GDP in per centum
oilbarrel = day-to-day use of oil in the state in 1000s of barrels per twenty-four hours
The information set consists of the ASEAN-6 states viz. , the Philippines, Thailand, Malaysia, Indonesia, Brunei and Singapore, with observations sing the variables above from the clip period of 1980 to 2008. We deem it appropriate to include these six states in the survey because they are close antagonistic parts of each other in the ASEAN part. Furthermore, the four staying states in the ASEAN, viz. the CLVM, had insufficient informations and a different of rate of economic growing that may hold distorted the analysis. The information for the theoretical account is gathered separately from different beginnings which include the World Bank, CIA and informations from single states. All informations use pecuniary units expressed as nominal values. We did non use a logarithm-logarithm or log-log theoretical account since it will extinguish some of our observations due to 0 values. Besides, instead than utilizing the option of universe oil monetary values per barrel to find the demand for oil, we alternatively opted to utilize oil barrel ingestions per twenty-four hours, given that the information is more readily available and a clearer indicant of the demand for oil of a peculiar state.
Panel Econometricss Model
In panel econometric modeling, the first to be determined is the chief theoretical account. This is done by comparing the different theoretical accounts of panel econometric arrested development. Through assorted testing, the best theoretical account is so chosen. In this survey, the theoretical accounts considered are the NaA?ve theoretical account, the Fixed Effects Models ( FEM ) and the Random Effects Model ( REM ) .
NaA?ve Model versus FEM, FEM versus FEM theoretical accounts
In taking the best theoretical account between the NaA?ve and FEM theoretical accounts, the first measure is to use the Wald ‘s trial. This technique uses the F-statistic to find the cogency of the limitations made on each of the theoretical accounts. The theoretical account with the highest F-statistic and the lowest p-value is the best theoretical account. Another trial that compares the naA?ve theoretical account to all other FEM theoretical accounts is the silent person variable trial. This is fundamentally similar to the Wald ‘s trial for proving the cogency of limitations. In this paper, we foremost determined which of the FEM theoretical accounts is the most appropriate by comparing FEM1, which assumes that infinite is changing keeping clip invariant, and FEM3, which assumes that both clip and infinite are changing. Following, we compare FEM2, which assumes that clip is changing, and FEM3, which assumes that once more both clip and infinite vary. From these two trials, we isolate the best FEM theoretical account and utilize this to compare to the NaA?ve theoretical account. This procedure finally determines whether a Fixed Effect Model or a NaA?ve Model is the most appropriate.
REM versus NaA?ve Model
The Breusch and Pagan Lagrangian multiplier trial is used to find which theoretical account is better between the Random Effects Model and the NaA?ve theoretical account. This trial uses a Chi2 statistic to find whether or non to accept or reject the void hypothesis that states that the NaA?ve theoretical account is better.
REM versus FEM Models
The concluding trial that was implemented is the Hausman trial to find which among the REM and FEM theoretical accounts is better. This trial besides uses a Chi2 statistic wherein the void hypothesis is that the REM theoretical account is better. This last trial finally determines the best theoretical account among all the panel econometrics theoretical accounts that will be used to construe the effects of the variables on C dioxide emanation.
Consequences and Interpretation
In this chapter, we discuss the consequences to the antecedently discussed methodological analysis for our panel informations arrested development.
First, utilizing the NaA?ve theoretical account which employs the simple Ordinary Least Squares arrested development or OLS, we determine the being of the jobs confronting panel informations which are multicollinearity, heteroscedasticity and autocorrelation. The consequences are shown as follows:
Variable | VIF 1/VIF
— — — — — — -+ — — — — — — — — — — —
oilbarrel | 5.39 0.185460
gross domestic products | 5.16 0.193680
population | 3.31 0.302286
agricultur~p | 1.86 0.538900
— — — — — — -+ — — — — — — — — — — —
Mean VIF | 3.93
Breusch-Pagan / Cook-Weisberg trial for heteroskedasticity
Holmium: Changeless discrepancy
Variables: fitted values of carbon dioxide
chi2 ( 1 ) = 41.54
Prob & gt ; chi2 = 0.0000
Wooldridge trial for autocorrelation in panel informations
H0: no first-order autocorrelation
F ( 1, 5 ) = 58.394
Prob & gt ; F = 0.0006
For the trial for multicollinearity, the Variance Inflation Factor is used. It was discovered that there exists a tolerable additive relationship among the independent variables, hence bespeaking that this is non a job. On the other manus, the Breusch-Pagan trial for heteroscedasticity resulted in the p-value is equal to 0, which indicates that the void hypothesis of changeless discrepancy should be rejected, finally bespeaking that there exists heteroscedasticity. This job now needs to be accounted for in gauging the consequences of our arrested development. Last, the Woolridge trial was employed to prove for autocorrelation, ensuing in the p-value of the trial being less than 0.05, bespeaking that the void hypothesis that there is no autocorrelation should be rejected. This indicates that there exists the job of autocorrelation in the theoretical account and hence, this should besides be accounted for in gauging the consequence of the concluding theoretical account.
In finding the best theoretical account, we foremost determined which among the FEM theoretical accounts is the best FEM theoretical account to utilize. For this, we employed the Wald ‘s trial as earlier described in the methodological analysis. For the Wald ‘s trial between FEM1 and FEM3 wherein FEM1 is the restricted theoretical account, the consequences showed the computed F as equal to 0.612 which is less than the critical F of 1.56. This indicates hence that the void hypothesis that FEM1 is better should be accepted because the limitations are valid.
Using the same trial, we compare FEM2 and FEM3, wherein FEM2 is the restricted theoretical account. The calculation showed that computed F is 27.56, which is greater than the critical F of 2.28. Therefore, the void hypothesis that FEM2 is better should be rejected, bespeaking that FEM3 is better. Because the Wald ‘s trial between FEM2 and FEM3 resulted in FEM3 being better, and the Wald ‘s trial between FEM3 and FEM1 resulted in FEM1 being better, we therefore conclude that FEM1 is the best Fixed Effect Model.
Now that we know that FEM1 is the best Fixed Effect Model, we can now compare it with the NaA?ve theoretical account using the same Wald ‘s trial. The computed F is equal to 33.22 which is far greater than 2.27. Therefore, we can accept the void hypothesis that the limitations are valid, bespeaking that FEM1 is better than the NaA?ve theoretical account.
Last, we compare the REM theoretical account to the FEM and NaA?ve theoretical accounts. The Breusch and Pagan Lagrangian Multiplier Test ( BPLM ) was used to compare the REM to NaA?ve theoretical account and the Hausman trial was employed to compare the REM and FEM theoretical accounts. The consequences of the trial are as follows:
Breusch and Pagan Lagrangian multiplier trial for random effects:
carbon dioxide [ state, t ] = Xb + u [ state ] + e [ state, t ]
| Var South Dakota = sqrt ( Var )
— — — — -+ — — — — — — — — — — — — — — –
carbon dioxide | 7341.668 85.68354
vitamin E | 135.5463 11.64243
u | 38.67077 6.218582
Trial: Var ( u ) = 0
chi2 ( 1 ) = 337.51
Prob & gt ; chi2 = 0.0000
Trial: Holmium: difference in coefficients non systematic
chi2 ( 3 ) = ( b-B ) ‘ [ ( V_b-V_B ) ^ ( -1 ) ] ( b-B )
Prob & gt ; chi2 = 0.5757
The BPLM uses a Chi2 distribution and resulted in a p-value of 0 which indicates that the void hypothesis of OLS being better should be rejected. Therefore, REM is the better theoretical account compared to the NaA?ve theoretical account. The Hausman trial resulted in a p-value of 0.58 which indicates that the void hypothesis of REM being better than the FEM theoretical accounts should be accepted. Therefore, the Random Effects Model is the most appropriate theoretical account for our empirical survey because it won over the NaA?ve and FEM theoretical accounts during all the statistical testing.
Because the REM is the most appropriate theoretical account, there is no demand to look into and bring around for heteroscedasticity and autocorrelation visual perception as the REM uses the Generalized Least Squares method which automatically cures the two jobs prevalent in panel econometric informations.
Random-effects GLS arrested development Number of obs = 174
Group variable ( one ) : state Number of groups = 6
R-sq: within = 0.9569 Obs per group: min = 29
between = 0.9683 avg = 29.0
overall = 0.9618 soap = 29
Random effects u_i ~ Gaussian Wald chi2 ( 4 ) = 3813.40
corr ( u_i, X ) = 0 ( assumed ) Prob & gt ; chi2 = 0.0000
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
carbon dioxide | Coef. Std. Err. omega P & gt ; |z| [ 95 % Conf. Interval ]
— — — — — — -+ — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
population | .2864152.0525573 5.45 0.000.1834049.3894255
gdp | 2.98e-10 3.10e-11 9.62 0.000 2.37e-10 3.59e-10
agricultur~p | -1.043537.2529716 -4.13 0.000 -1.539352 -.5477218
oilbarrel | .1658965.0093108 17.82 0.000.1476477.1841453
_cons | -4.604103 4.778689 -0.96 0.335 -13.97016 4.761955
— — — — — — -+ — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
sigma_u | 6.2185824
sigma_e | 11.642434
rho | .22196893 ( fraction of discrepancy due to u_i )
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
Regressing the REM theoretical account resulted in all the variables being important, aside from the invariable. This indicates that an addition in population by 1 individual will lend 286415.2 metric dozenss of C emanations per twelvemonth. Besides, the addition by a dollar in the GDP of a state will lend 0.000298 metric dozenss of C emanation per twelvemonth. Although this figure seems little, it should be noted that most of the clip developing states yield an one-year growing of 5 to 7 % of their GDP, which are in 1000000s of dollars, and hence can impact mostly. Both population and GDP fulfilled their a priori outlooks and positively affect CO2 emanations.
On the other manus, consequences besides show that an addition in the per centum of agricultural income with regard to GDP contributes lesser C emanation by 1,043,537 metric dozenss. This besides fulfils the a priori outlook that states dominated by agricultural income contribute much less to carbon dioxide emanations than states dominated by industrial income. Last, it can be interpreted that a unit addition in oil barrels per twenty-four hours contributes to one-year C emanations by 165896.5 metric dozenss. This besides fulfils its a priori outlook that with increased oil ingestion, which is needed for the usage of fossil fuels, CO2 emissions addition every bit good.
The entire explanatory power of the variables on CO2 emanations for this panel data arrested development theoretical account utilizing the Random Effects Model is 96.18 % . This indicates that the arrested development has a high goodness of tantrum, and that the consequences faithfully explain 96.18 % of the observations.
Decision and Recommendation
The consequences of our empirical survey show that an addition in GDP contributes to higher C emanations. Besides, it was proven that if a greater portion of a state ‘s GDP is from agribusiness activities, so the consequence on overall C emanation will be less. These consequences imply that because the ASEAN 6 states are preponderantly agriculture-oriented but now traveling towards the way of advancement and industrialisation to maximise efficiency of procedures and increase their income growing, the motion of the ASEAN 6 states is toward the way of harming the environment and increasing their C emanations.
In this clip and age wherein planetary heating is no longer merely a theory being studied and the effects are now visibly attesting themselves and can be experienced by people around the universe, this deduction should non be taken lightly. The manifestations that the ASEAN 6 states are traveling towards advancement through industrialisation and most likely breathing more C emanations in the procedure should be a concern for the full ASEAN web. Possibly it is inevitable that economic growing and C emanations go manus in manus ; nevertheless, modern surveies and new research in the field of clime alteration extenuation show that there are ways and policies to decrease the C emanations of states. One simple yet effectual manner to decrease the C footmark of states is to implement energy efficiency. This involves using less power and more energy efficient steps in bring forthing the same goods needed by the state. Besides, in the production of agricultural goods, developing states such as the ASEAN 6 can keep their natural farm-based procedures which contribute to extenuating clime alteration, such as irrigation and dependence on bio-mass fuel. Besides, they can stress low external input farming patterns such as organic agriculture. One policy authoritiess can implement is to back up the purchase of organic merchandises from less developed states by people in high-income states in order to advance these climate-friendly patterns. This will indirectly necessitate higher-income states to pay for their higher emanation of nursery gases, seting force per unit area on them to either cut down their emanations or pay the monetary value.
Besides, our survey resulted in the determination that population increases contribute mostly to the addition in C emanations. Population addition has been a job that has plagued developing states, particularly in Asia, since clip immemorial. In the Philippine scenario, for illustration, our Catholic faith hinders us from following proper population control measures such as preventives and birth control, ensuing in a population growing rate that is normally greater than our economic growing rate. However, what this survey proves is that the job of population growing is no longer merely a job for each single state, but the job of the universe. As the size of the universe ‘s population additions, so does our C footmark, which contributes daily to planetary heating which threatens world ‘s endurance.
For this job, authoritiess play a cardinal function in implementing the proper policies to decelerate down the population growing rate in states. Some policy steps that authoritiess can use are birth control and household planning policies to decrease the birth rate and birthrate rate of the population, every bit good as provide for the better planning of childbearing and growing of households. Given that bulk of the population in the ASEAN development states are below the poorness line and the fact that it is the hapless households who have more kids compared with the rich households, the ASEAN authoritiess should implement strategic household be aftering plans to those who need it, viz. the hapless. Governments should make effectual seminars and workshops for hapless households educating them on effectual agencies of population control that are easy applicable and come-at-able in their state of affairs. It is besides of import to educate the citizens on the effects of overpopulation on clime alteration so that people can break understand the attempts of the authorities and contribute to them.
Last, it is one undeniable fact that rough oil ingestion contributes greatly to carbon emanation, as shown non merely by our survey but in several literature every bit good. In turn toing this job, most surveies have suggested finding alternate beginnings of energy that are less harmful to the environment. This has been the end of environmental scientific discipline for old ages, and like other surveies, we besides recommend the same solution. It is our recommendation to authoritiess, peculiarly those in the ASEAN-6 states, that they should make policies to put in instruction and better research and development in order to develop engineering that will happen alternate beginnings of energy. Developed states that have more financess for technological research can besides make their portion in doing up for their higher C emanations by supplying developing states with the engineering for clime alteration extenuation. Another policy authoritiess could implement is the offering of wagess or inducements for scientists within the state who could make engineering or contribute to the advancement in researching the use of new energy resources.
With the event of planetary research proliferating in the field of clime alteration extenuation, energy efficiency, and population control, there is no uncertainty that there already exists steps that can be applied to every industry and state. The undertaking for every person now is to set force per unit area on states and authoritiess, such as that of the ASEAN 6 states, to hold their motion towards higher C emanations and repositing it towards the planetary end of extenuating clime alteration.