TY - JOUR
T1 - Does insurance sector development improve environmental quality? Evidence from BRICS
AU - Appiah-Otoo, Isaac
AU - Acheampong, Alex O.
N1 - Publisher Copyright:
© 2021, The Author(s), under exclusive licence to Springer-Verlag GmbH, DE part of Springer Nature.
PY - 2021/6
Y1 - 2021/6
N2 - The effect of financial development measured by banks, bonds, and stocks on carbon dioxide emissions (CO2E) has been widely studied while not much is known about the effect of the insurance sector development on CO2E. Thus, this study fills this void by estimating the effect of insurance consumption on CO2E for BRICS (Brazil, Russia, India, China, and South Africa) from 2000 to 2016 using the instrumental variable generalized method of moments model. The findings indicate that, generally, insurance sector development spurs CO2E in BRICS. Specifically, a 10% rise in life insurance development increases BRICS CO2E by 1%. Also, a 10% rise in non-life insurance development increases BRICS CO2E by 4%. Finally, a 10% rise in the composite insurance development index increases BRICS CO2E by 2%. The study further finds that population size, trade openness, and energy consumption drive CO2E in BRICS, while economic growth mitigates CO2E. These results were robust to alternative econometric estimators, and alternative CO2E proxy. Policies that promote green insurance consumption are recommended.
AB - The effect of financial development measured by banks, bonds, and stocks on carbon dioxide emissions (CO2E) has been widely studied while not much is known about the effect of the insurance sector development on CO2E. Thus, this study fills this void by estimating the effect of insurance consumption on CO2E for BRICS (Brazil, Russia, India, China, and South Africa) from 2000 to 2016 using the instrumental variable generalized method of moments model. The findings indicate that, generally, insurance sector development spurs CO2E in BRICS. Specifically, a 10% rise in life insurance development increases BRICS CO2E by 1%. Also, a 10% rise in non-life insurance development increases BRICS CO2E by 4%. Finally, a 10% rise in the composite insurance development index increases BRICS CO2E by 2%. The study further finds that population size, trade openness, and energy consumption drive CO2E in BRICS, while economic growth mitigates CO2E. These results were robust to alternative econometric estimators, and alternative CO2E proxy. Policies that promote green insurance consumption are recommended.
UR - http://www.scopus.com/inward/record.url?scp=85100791284&partnerID=8YFLogxK
U2 - 10.1007/s11356-021-12760-w
DO - 10.1007/s11356-021-12760-w
M3 - Article
C2 - 33555466
AN - SCOPUS:85100791284
SN - 0944-1344
VL - 28
SP - 29432
EP - 29444
JO - Environmental Science and Pollution Research
JF - Environmental Science and Pollution Research
IS - 23
ER -
