Spatial Effects of Energy Consumption and Green GDP in Regional Agreements

One of the main factors in environmental degradation and climate change is the consumption of fossil fuels. For this reason, cooperation between countries to overcome environmental challenges is seen more than ever. In this regard, regional economic treaties are a good platform for advancing common policies in the development of renewable energy, because this type of energy has fewer external effects on the environment. Accordingly, the purpose of this paper is to investigate the spatial effects of energy consumption and green production in Shanghai Cooperation Organization member states. For this purpose, the spatial panel data econometric approach has been used. Spatial effects refer to the effects of neighboring countries. According to CO2 emissions, the spatial effects of the positive or negative effects of these emissions and other determinants of neighboring countries are local. The results show that although both fossil fuels and renewable energy have a negative effect on green GDP, the impact of fossil fuels is almost four times greater. On the other hand, proximity and membership in the Shanghai Cooperation Organization have had a positive effect on green GDP in member countries, as countries have tried to coordinate their development policies in the field of renewable energy. Therefore, the development and strengthening of regional cooperation can play an effective role in controlling pollution caused by fossil fuel consumption and ultimately improve green production.