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Examining the relationship between fiscal decentralization, renewable energy intensity, and carbon footprints in Canada by using the newly constructed bootstrap Fourier Granger causality test in quantile

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Abstract

Current paper studies the nexus between fiscal decentralization, renewable energy intensity, and carbon footprints in Canada. Preliminary empirical findings strictly reject the preposition of data normality and highlight that the observed nexus is quantile dependent. Additionally, our test looks for systematic deviations from zero in the causality at a certain quantile and frequency. In particular, we consider the bootstrap Fourier Granger causality test in quantile. At each frequency, we test the sample causality against the distribution of the median causality across frequencies estimated for that process, which may disclose the misleading causal link in previous studies using only traditional Granger causality. Our results show a negative one-way Granger causality from fiscal decentralization to carbon footprints (quantiles: 0.1–0.9) and renewable energy intensity to carbon footprints, respectively (quantiles: 0.1–0.9). Herein, results show a positive one-way Granger causality through fiscal decentralization to renewable energy intensity (quantiles: 0.3–0.7). These conclusions are used to formulate policy suggestions.

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Notes

  1. As a concern to this paper, we used REI as renewable energy intensity to explore the overall nexus among fiscal decentralization, renewable energy intensity, and carbon footprints. As a concern to previous literature, no study explored the relationship among these three variables simultaneously. Furthermore, renewable energy intensity is also a newly developed variable, and we will consider previous studies that used renewable energy consumption to know the relationship among these three variables.

  2. Due to limited studies on the relationship between fiscal decentralization and carbon footprints, we will consider the studies of CO2 emissions as carbon footprints. Carbon footprint is the total amount of greenhouse gas (GHG) emissions caused by individuals, events, organizations, services, places, or products, measured in carbon dioxide equivalent (CO2) so that we can consider this in our literature for the sake of knowing the relationship among them.

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Funding

The first author disclosed receipt of the following financial support for the research, authorship, and/or publication of this article. This work is financially supported by the Fundamental Research Start-up Funds from Guangdong University of Petrochemical Technology (Project No. 702/5210012) (Grant No. 2020rc059).

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  1. School of Economics and Management, Guangdong University of Petrochemical Technology, Maoming, Guangdong, China

    Farrukh Shahzad

  2. School of Economics and Management, Huzhou University, Huzhou City, Zhejiang Province, China

    Zeeshan Fareed

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Farrukh Shahzad: investigation, writing-original draft, conceptualization, and methodology. Zeeshan Fareed: conceptualization, supervision, and investigation.

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Shahzad, F., Fareed, Z. Examining the relationship between fiscal decentralization, renewable energy intensity, and carbon footprints in Canada by using the newly constructed bootstrap Fourier Granger causality test in quantile. Environ Sci Pollut Res 30, 4617–4626 (2023). https://doi.org/10.1007/s11356-022-22513-y

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