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The impact of carbon emissions on country risk: Evidence from the G7 economies

Chaudhry, S.M., Ahmed, R., Shafiullah, M., Duc Huynh, T.L. (2020) The impact of carbon emissions on country risk: Evidence from the G7 economies. Journal of Environmental Management, 265 . Article Number 110533. ISSN 0301-4797. (doi:10.1016/j.jenvman.2020.110533) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided) (KAR id:96235)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided. (Contact us about this Publication)
Official URL:
https://doi.org/10.1016/j.jenvman.2020.110533

Abstract

This paper empirically investigates the effect of carbon emissions on sovereign risk? To answer this question, we use fixed effects model by using annual data from G7 advanced economies, which includes Canada, France, Germany, Italy, Japan, UK and USA, for the period from 1996 to 2014. We employ a novel extreme value theory to measure sovereign risk. The results indicate that climate change (carbon emissions) are likely to increase sovereign risk significantly. We also expand our analysis to some specific sectors, as some of the sectors emit more carbon than others. Specifically, we take top three polluting sectors namely: transportation, electricity and industry and show that they are more likely to increase the sovereign risk. Our results are robust to change in risk measures, estimation in differences and dynamic version of econometric models. Therefore, we have robust consideration that the carbon emissions significantly explain the sovereign risk.

Item Type: Article
DOI/Identification number: 10.1016/j.jenvman.2020.110533
Uncontrolled keywords: carbon; carbon dioxide, carbon emission; climate change; econometrics; electricity industry; numerical model; risk assessment; sovereignty, Article; Canada; carbon footprint; climate change; econometric model; economic aspect; electricity; France; Germany; greenhouse effect; industry; Italy; Japan; traffic and transport; United Kingdom; United States, Canada; France; Germany; Italy; Japan; United Kingdom; United States, Canada; Carbon; Carbon Dioxide; France; Germany; Italy; Japan
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Divisions > Kent Business School - Division > Department of Accounting and Finance
Depositing User: Rizwan Ahmed
Date Deposited: 16 Aug 2022 11:05 UTC
Last Modified: 17 Aug 2022 09:52 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/96235 (The current URI for this page, for reference purposes)

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