Towards Carbon Neutrality: The Impact of Private AI Investment and Financial Development in the United States – An Empirical Study Using the STIRPAT Model

Authors

  • Shaharina Shoha Department of Mathematics, Western Kentucky University, Bowling Green, KY, USA
  • Sarder Abdulla Al Shiam Department of Management -Business Analytics, St Francis College,USA
  • Shake Ibna Abir Department of Mathematics, Western Kentucky University, Bowling Green, KY, USA
  • Dipankar Saha Department of Economics, Mizoram University, Tanhril, Aizawl, Mizoram, India, 796004
  • Shewly Bala Department of Finance, University of Dhaka, Dhaka 1000, Bangladesh https://orcid.org/0009-0002-6547-8366
  • Md Shah Ali Dolon Department of Finance and Financial Analytics, University of New Haven, West Haven, United States
  • Hasibur Rahman School of Business & Technology, Washington University of Virginia, 4300 Evergreen Ln, Annandale, VA 22003.
  • Md Eleais Department of Economics, Noakhali Science and Technology University, Sonapur, Noakhali-3814, Bangladesh
  • Afsana Akhter Department of Economics, Noakhali Science and Technology University, Sonapur, Noakhali-3814, Bangladesh
  • Mohammad Ridwan Department of Economics, Noakhali Science and Technology University
  • Robeena Bibi School of Public Administration, Hohai University, Nanjing China

DOI:

https://doi.org/10.56556/jescae.v3i4.982

Keywords:

Private AI Investment, Financial Development, FDI, Carbon Neutrality, United States

Abstract

This investigation analyses the influence of private AI investment and financial development (FD) on CO2 emissions in the United States, using the STIRPAT framework to account for the functions of GDP, population, and foreign direct investment (FDI). The data's robustness was verified through the application of a variety of unit root tests, which confirmed that the variables are free of unit root issues and exhibit a varied order of integration. The ARDL bound test was used to investigate the cointegration among the variables and it found a long-run equilibrium relationship. The ARDL model results show that income, FDI, FD, and population significantly increase CO2 emissions in both the short and long term. In contrast, we found that private investment in AI led to a significant reduction in CO2 emissions over these time frames. Additional estimations were conducted using FMOLS, DOLS, and CCR methods to verify the ARDL results, all of which attested to the initial findings' robustness. In addition, the study implemented a pairwise Granger causality test to illustrate the directional relationships between the variables. There is a unidirectional causal link between GDP, private AI investment, FDI, population, and CO2 emissions, according to the findings. Most notably, we observed bidirectional causality between CO2 emissions and FD. Diagnostic tests further corroborated the validity of the study's conclusions, confirming that the model is free from specification errors, serial correlation, and heteroscedasticity.

Author Biographies

Shaharina Shoha, Department of Mathematics, Western Kentucky University, Bowling Green, KY, USA

Shaharina Shoha is currently pursuing a Master's degree in the Department of Mathematics at Western Kentucky University, located in Bowling Green, Kentucky, USA. Her academic journey is focused on deepening her expertise in mathematical sciences, contributing to both theoretical and applied research. Her commitment to her studies reflects a strong dedication to advancing her knowledge in mathematics, with the aim of making meaningful contributions to the field.

Sarder Abdulla Al Shiam, Department of Management -Business Analytics, St Francis College,USA

Sarder Abdulla Al Shiam is currently pursuing a Master's degree in the Department of Management with a focus on Business Analytics at St. Francis College, USA. His academic interests lie in harnessing data-driven strategies to solve complex business problems. Sarder is dedicated to mastering the skills required for effective decision-making and analysis in the modern business landscape. His affiliation with St. Francis College underscores his commitment to academic and professional excellence, as he aims to contribute valuable insights to the field of business analytics.

Shake Ibna Abir, Department of Mathematics, Western Kentucky University, Bowling Green, KY, USA

Shake Ibna Abir is currently pursuing a Master's degree in the Department of Mathematics at Western Kentucky University, located in Bowling Green, Kentucky, USA. His academic journey is focused on deepening his expertise in mathematical sciences, contributing to both theoretical and applied research. Shake's commitment to his studies reflects a strong dedication to advancing his knowledge in mathematics, with the aim of making meaningful contributions to the field. His affiliation with Western Kentucky University highlights his pursuit of academic excellence and his aspiration to impact the broader mathematical community.

Md Shah Ali Dolon, Department of Finance and Financial Analytics, University of New Haven, West Haven, United States

Md Shah Ali Dolon is currently pursuing a Master's degree in the Department of Finance and Financial Analytics at the University of New Haven, located in West Haven, United States. His academic focus lies in the intersection of finance and data analysis, where he is developing the skills necessary to navigate and analyze complex financial markets. Md Shah Ali Dolon is committed to leveraging advanced analytics to drive financial decision-making and strategy. His affiliation with the University of New Haven underscores his dedication to academic excellence and his aspiration to contribute to the field of finance and analytics.

 

Hasibur Rahman, School of Business & Technology, Washington University of Virginia, 4300 Evergreen Ln, Annandale, VA 22003.

Hasibur Rahman is currently pursuing a Master's degree at the School of Business & Technology, Washington University of Virginia, located in Annandale, Virginia. His academic journey is focused on gaining in-depth knowledge and skills in business and technology, preparing him for the challenges of the modern professional world. Hasibur is dedicated to understanding the dynamic interplay between business strategies and technological advancements, aiming to contribute innovative solutions in these fields. His affiliation with Washington University of Virginia reflects his commitment to academic excellence and his ambition to make a significant impact in the business and technology sectors.

Md Eleais, Department of Economics, Noakhali Science and Technology University, Sonapur, Noakhali-3814, Bangladesh

Md. Eleais is a graduate from the Department of Economics at Noakhali Science and Technology University. He is currently involved in the fields of data analysis and research, where he applies his economic knowledge to analyze data and uncover insights. His academic background provides a strong foundation for his work, enabling him to contribute effectively to various research projects. Md. Eleais is dedicated to advancing his expertise in data-driven research, aiming to make significant contributions to the understanding of economic trends and patterns. His work reflects a commitment to excellence in both data analysis and economics.

Afsana Akhter, Department of Economics, Noakhali Science and Technology University, Sonapur, Noakhali-3814, Bangladesh

Afsana Rinky is a graduate from the Department of Economics at Noakhali Science and Technology University. She is currently involved in the fields of data analysis and research, where she applies her strong analytical skills to explore economic trends and patterns. Afsana's academic background and hands-on experience in research make her a valuable contributor to various projects, as she continuously seeks to deepen her understanding of economic phenomena through data-driven approaches. Her work reflects a dedication to advancing knowledge in economics and related disciplines.

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Published

2024-11-16

How to Cite

Shoha, S., Abdulla Al Shiam, S., Abir, S. I., Dipankar Saha, Shewly Bala, Dolon, M. S. A., … Robeena Bibi. (2024). Towards Carbon Neutrality: The Impact of Private AI Investment and Financial Development in the United States – An Empirical Study Using the STIRPAT Model. Journal of Environmental Science and Economics, 3(4), 59–79. https://doi.org/10.56556/jescae.v3i4.982

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Section

Research Article

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