Determinants of agricultural emissions: panel data evidence from a global sample

Abstract

Using the panel data of 89 economies from 1995-2012, this study examines the major drivers of agricultural emissions while considering affluence, energy intensity, agriculture value added and economic integration. We find long-run cointegration among the variables. Furthermore, our empirical results based on a dynamic fixed effects autoregressive distributed lag model show that the increases in income and economic integration - proxied by trade and foreign direct investment (FDI) - are the major contributors to higher greenhouse gas (GHG) emissions from agriculture in the short run. Additionally, the increases in income, agriculture value added and energy consumption are the major drivers of agricultural emissions in the long run. Notably, trade openness and FDI inflows have significantly negative effects on GHG emissions from agriculture in the long run. These results apply to methane and nitrous oxide emissions. The empirical findings vary across three subsamples of countries at different development stages.