Heterogeneous effect of oil production on environmental degradation: panel evidence from OPEC member countries

Purpose The purpose of this paper is to look at the asymmetric effect of oil production on environmental degradation in OPEC member countries from 1970–2019. Design/methodology/approach The authors build a nonlinear panel ARDL–PMG model using the Shin et al. (2014) nonlinear autoregressive distributed lag (ARDL) approach in panel form to assess both the short- and long-run impact of positive and negative oil production movements on CO2 emissions. Findings The result demonstrates that the variables are cointegrated. According to the linear long run coefficients, oil production, FDI inflows and economic growth both have a positive and significant relationship with CO2 emissions, implying that they deteriorate environmental quality in OPEC countries, while renewable energy has a negative relationship with CO2, implying that increasing renewable energy improves environmental quality. The asymmetric findings prove that positive and negative shocks of oil production exert a positive effect on carbon emissions in short run and long run. Research limitations/implications To begin with, the empirical assessments do not include all OPEC member nations; researchers are advised to resolve this constraint by looking at the economies of other OPEC members. Albeit the lack of data for other energy sources may serve as another constraint of this research, future research is expected to broaden the current framework via other energy sources such as nuclear, electricity, biomass, solar as well as wind. Originality/value The research adds to the body of knowledge as many of the prevailing studies in the literature failed to look at the asymmetric effect of oil production on the quality of environment. This is another gap in the literature that the current study is set out to fill. This study adds oil production as an explanatory variable and helps to extend the existing literature for OPEC countries, which could propose a solution to deal with ensuing environmental issues.

Testing the joint stock market efficiency of OPEC countries

The study investigates the joint market efficiency hypothesis of the OPEC countries by obtaining monthly stock price data from seven OPEC countries from January, 2005 to April, 2016. The study confirms the risk-return tradeoff in the OPEC stock markets. While most relationships are positive only a pair of country shows strong negative association Results of both parametric and nonparametric tests indicate that all OPEC members’ monthly stock return, except Qatar, are not weak-efficient. This implies that not all OPEC stock markets are efficient. Meanwhile, the study finds that current monthly stock return of one country member can be predicted using the historical monthly price movement of another OPEC member. As a whole, the monthly stock price of OPEC countries are not jointly weak efficient. Recommendations were offered based on these important discoveries.

Estimation of professionals’ conformity for oil production cut (in the order of discussion)

The oil industry of Azerbaijan passed a long way of development. With the execution of the Contract of the Century at the end of XX century, new perspectives for the development of the economy of the country opened. However, since the beginning of COVID-19 pandemic, as an OPEC+ member Azerbaijan has assumed corresponding responsibilities on the oil production cut. As a result, oil production cut is planned from the beginning of the middle of 2020 for 96 thousand barrels through May-June, for 63 thousand barrels through July-December, as well as 30 thousand barrels during January 2021 – April 2022. According to this, SOCAR has developed strategic approaches on the measures including oil production cut, capital investment and well suspension. To prevent unexpected risks in the stage of rate decline of oil production, it is necessary to choose a mechanism of making-decision with leading professionals of the field, who should consider the complex of technical, geological and organizational measures, as well as the consistency of their execution in pandemic and after it ends. It is also significant to consider such qualities as their professional competence, far-sightedness, which, therefore, should play an important role in reviewed issue. Using the “Method of expert estimation” the professionals’ conformity with the fulfillment of evaluation calculation are reviewed.