Towards achieving environmental sustainability target in Italy. The role of energy, real income and globalization

Abstract

One of the major challenges several economies of the world is facing today is striking a balance between mitigating environmental degradation amidst the dire desire for economic growth and environmental sustainability. In order to reduce environmental pollution and sustain the environment, countries around theworld are embarking on several policy measures to ameliorate climate change and reduce greenhouse gas emissions. On this premise, this study investigates the role of energy, real income and globalization in the quest to achieve environmental sustainability in the case of Italy using Autoregressive Distributed Lag model for empirical estimators and Toda and Yamamoto predictive methodology over the period 1970-2014. Based on empirical results, we found that a percent increase in kg oil equivalent per capita of energy consumed and globalization index led to 0.928% increase and 0.914% decrease in metric ton per capita of CO2 emissions in the short-run, and 1.796% increase and 1.769% decrease inmetric ton per capita of CO2 emissions in the long-run, while the real income has no significant impact on the metric ton per capita of carbon emissions level both in the short-and long-run. The autonomous term also showed an interesting result, we found that, holding other factor constant, a percent increase in the constant term will lead to 1.879% decrease in metric ton per capita of carbon emissions in the short-run, and 3.635% decrease in metric ton per capita of carbon emissions in the long-run thus, we infer that Italy has been successful in balancing environmental conversation policieswith macroeconomic objectives. This study provides credible policy suggestions for policymakers in energy intense economies around the world. (C) 2019 Elsevier B.V. All rights reserved.