Global determinants of methane emissions in OECD countries: A dynamic panel approach

Abstract

Methane (CH4), an often-overlooked greenhouse gas (GHG), has a significant impact on the environment. Although it receives less attention than carbon dioxide (CO2), it is the second most important GHG in terms of its ability to trap heat in the atmosphere. Few studies have analyzed the determinants of CH4 emissions, especially those from the energy sector. Therefore, this study provides relevant information on the impact of GDP, primary and renewable energy consumption, human development index and trade openness on methane emissions in OECD countries. Using advanced cointegration approaches, we find that GDP and primary energy consumption increase CH4 emissions, while renewable energy consumption and human development mitigate their growth. However, the impact of these variables varied over time. No significant effect of trade openness on methane emissions was found. We recommend specific policies for OECD countries to reduce methane emissions, especially for the most polluting countries. Governments should promote renewable energy sources (solar, wind, hydro) to reduce reliance on fossil fuels, thereby minimizing methane leakage during extraction and transport. In addition, investing in human development can promote sustainable behaviors and further reduce emissions, addressing both environmental and social concerns.