Industrialization, Freight Transport and Environmental Quality: Evidence from Belt and Road Initiative Economies

Belt and Road initiative has been proposed by China to initiate the cooperation among relevant countries in sector of energy and Trade. The study investigate highlighting the relationship between industrial value added per capita, transport freight and CO2 emission among the partner countries of Belt and Road initiatives by using panel of 33 economies from 1986-2017. Study includes panel autoregressive distributed lag model (ARDL) to estimate the long-run relationship among variables. Estimated results of pool mean group (PMG) indicates that increase in industrial value added per capita and transport freight deteriorates the quality of environment in long-run. However, short-run results of granger causality reveals positive and unidirectional causality running from industrial value added per capita to emission of CO2 while transport freight and CO2 emission shows bidirectional causality. The study emphasized to formulate environment friendly policies in industrial and transport sector.