Impact of Renewable Energy on International Trade of Oil and Gas

Abstract
This paper investigates the impact on international trade of oil and gas due to renewable energy,
more specifically, how it impacts environment, employment and international trade in this global
era. Developed from previous research on the research context, the proposed framework argues
that renewable energy has a positive impact on environment and employment sectors along with
international trade as well as people are supporting it but due to more growth in renewables, as
alternatives for oil and gas the international trade of oil and gas is declining. Empirical findings
based on 101 participants of energy users reveal that renewable energy is not being promoted
well, people want to use renewables and are more concerned about the factors whilst not all
products of oil and gas have an alternative or efficient which again concludes that, however the
renewable energy has a significant impact on oil and gas industry but the industry will still
continue to make profit. Furthermore, the results reveal that people say they are more cautious
about the environment and jobs, but the input made by them is comparatively less. However, the
findings indicate that there are people who wish to pay more for renewables and there is a lack of
awareness among people regarding the alternatives present in today’s world, which offers an
opportunity for further research. All in all, the paper sheds new light to the promotion status and
globalisation effects are areas which needs further research, with evidence highlighting the oil
and gas sector is further developing and stepping ahead to make the globe a better place to live.
Keywords: Oil & Gas, Renewable Energy, Globalization, Environment, Employment,
International trade
(Total number of words: 12,000)

Table of Contents
Chapter 1: Introduction................................................................................................... 4
1.0 Introduction..................................................................................................... 4
1.1 Background study.............................................................................................. 4
1.2 Objectives........................................................................................................ 4
1.3 Research approach................................................................................................ 5
1.4 Summary.............................................................................................................. 5
1.5 Conclusion............................................................................................................... 5
Chapter 2: Literature Review.............................................................................................. 6
2.1 Introduction............................................................................................................ 6
2.2 International trade:................................................................................................... 6
2.3 Globalization:......................................................................................................... 8
2.4 Oil and Gas:........................................................................................................... 8
2.5 Renewable Energy:................................................................................................. 12
2.6 Conclusion........................................................................................................... 13
Chapter 3: Conceptual Framework...........................................................................14
3.1 Renewable energy and its impact on the environment........................15
3.2 Due to international trade, increase or decrease in prices affects people’s purchasing power
.............................................................................................................................. 15
3.3 The employment opportunities affecting the.........................................15
3.4 Whether renewable energy is being used over oil and gas.................16
3.5 Conclusion.................................................................................................... 16
Chapter 4: Methodology.................................................................................................. 17
4.1 Research Philosophy:.............................................................................................. 17
4.3 Research Strategy.................................................................................................. 19
4.4 Research Design.................................................................................................... 20
4.5 Conclusion........................................................................................................... 20
Chapter 5: Results/Findings........................................................................................... 21
51. Introduction........................................................................................................ 21
5.2 Demographic Information...................................................................................... 21
5.3 Impact of Renewable Energy to the Environment.......................................................22

5.4 Impact of Renewable Energy on International Trade...................................................25
5.5 Impact of Renewable Energy International trade on Job Opportunities......................26
5.3 Hypothesis Testing.................................................................................................... 27
5.4 Summary.......................................................................................................... 32
Chapter 6: Conclusion..................................................................................................... 34
6.2 Study Limitation................................................................................................. 36
References................................................................................................................... 37
Conti, J., Holtberg, P., Diefenderfer, J., LaRose, A., Turnure, J.T. and Westfall, L.,
2016. International energy outlook 2016 with projections to 2040 (No. DOE/EIA-0484
(2016)). USDOE Energy Information Administration (EIA), Washington, DC (United States).
Office of Energy Analysis........................................................................................ 38
ovacool, B.K. and Drupady, I.M., 2016. Energy access, poverty, and development: the
governance of small-scale renewable energy in developing Asia. Routledge..................38
S Quaschning, V., 2016. Understanding renewable energy systems. Routledge.............38

Chapter 1: Introduction
1.0 Introduction
There has been an increased rate when it comes to the growth of the renewable energy especially
in the year 2016 where the new power of the worldwide energy grid has witnessed an additional
of the two-thirds of the renewable energy. Additionally, the demand for the energy power have
continued to rise without leaving behind the developing economies within the globe, and as
results, more attention has been put towards the renewable energy sources which have also
continued to increase as well. The growth in renewable energy sources depends on several
factors ranging from the fluctuations in the costs of renewable energy. For instance, the
generation of wind and solar energy power have continued to show a decreased price as time
goes by despite the fact that its demand continued to rise, (Kannan, and Vakeesan, 2016).
1.1 Background study
International trade is the exchange of goods and services across international borders. It occurs
when a firm exports goods and services to consumers in another country but only if there are no
government restrictions on what citizens can buy or sell from another country it is known as
‘Free Trade’. As we live in a globalized world where goods and services flow from one country
to another, like Boeing and radiography, with the movement of people and ideas due to
immigration or change in standard of living, and financial flows like capital flows(stock)for
higher interest rates and profit, which increases the integration of economies around the world. In
a global economy the production, tastes, labor markets, competition and financial markets are
rapidly globalizing which deeply affects consumers, workers, investors and voters.
Globalization is not new as 2000 years ago Roman coins were also circulated throughout the
empire. Globalization is a revolution that in terms of scope and significance is comparable to the
industrial revolution(1760-1820) but while the industrial revolution took place over a century,
today’s globalization is taking place in a decade or two as it has been facilitated by revolution in
telecommunication, transportation and technology as such. The world today is facing
international economic problems and challenges that can be understood by international
economic theories and policies that includes international trade theory and policies. International
economics mainly deals with the economic and finance interdependence among nations. It
analyses the flow of goods, payments, services, and people between a nation and the rest of the
world and the policies directed at regulating these flows. Due to globalization there is more
efficient utilization of labor and capital throughout the world as well as opportunities for higher
returns risk diversion for individual and companies, but on the other hand as international trade
and globalization are major causes for environmental damage, periodic financial crises and job
losses.
1.2 Objectives
This paper investigates the impact on international trade of oil and gas due to renewable energy,
more specifically,
1. To examine whether the renewable energy have positive impact on the environment
2. To determine whether international trade is directly or indirectly affecting general
public.
3. To examine whether the oil & gas industry have impacted employment opportunities.
4. To determine whether renewable energy is being used over oil and gas.

1.3 Research approach
The research approach entails information that ranges from the introduction, conceptual
framework ads well as the development of the hypotheses, methodology, analysis and results,
interpretations and conclusions of the study findings. The introduction includes information on
the study background focusing on the research topic which is the impact on international trade of
oil and gas due to renewable energy, more specifically, how it impacts environment, employment
and international trade in this global era. Other information captured on the background are
study objectives, and general summary. The conceptual framework has addressed the
development of the hypotheses which have also considered the research results as well. There are
three common factors which are affected by oil and gas and renewable energy are considered as
h1, h2, and h3. For the literature section, the past studies have been critically reviewed to identify
the study gaps to be fulfilled by the current study. Therefore, the main concepts of the study
include international trade on oil & gas impacting the renewable energy, environment,
employment opportunities and general costs of the renewable energy. In total, there are 4
hypotheses (H1-H4) to be tested and forms part of the conceptual framework. Furthermore, the
research methodology section has captured information relating to; research philosophy, research
approach, research strategy, and most importantly research design as well as the conclusion part
that has been presented and justified. From the results section, a total of 101 respondents formed
part of the analyzed dataset where; 47(46.5%) were aged between 30-40 years followed by 32
(31.7%) who were aged 20-30 years. Moreover, 12 (11.9%) and 10 (9.9%) respondents were
aged 40-50 and above 50 years respectively. Moreover, the proposed hypotheses (H1-H4) were
either accepted or rejected to be true based on the results of the SPSS analysis
1.4 Summary
High population growth, the ongoing industrialization, and improving standards of living
contribute to a higher demand for fossil energy. In the developed countries, energy use per capita
is already extremely high and continues to increase slowly, and the much smaller developing
nations’ share of commercial energy consumption is expected to increase to nearly 40 percent by
2010. Energy consumption in the transportation sector is also expected to grow in both the
developed and the developing countries as higher incomes will lead to a rising number of private
cars in use. Energy consumption leads both to local and global problems of air pollution.
1.5 Conclusion
Different populations within the globe have an increase demand of renewable energy use. This is
associated by large population growth worldwide. Specially, transport sector has the leading
demand when it comes to using the renewable energy which is due to the rampant increase in
private cars owned by the people.

Chapter 2: Literature Review
2.1 Introduction
This chapter discusses the research relating to International Trade and Globalization.
Furthermore, the Oil and Gas and Renewable Energy will be explained to review. In order to
investigate the impact of renewable energy on Oil and Gas, the inter-relation and strategies with
environment and employment will be discussed. These discussions are validated by the different
literature in order to convey an in-depth understanding of the subject matter at hand. Finally, this
literature review and discussions will lead to the conceptual framework of this present study.
2.2 International trade:
According to published literature, Theory of international trade is not hard to find as nations
trade for variety of reasons. In eighteenth century with political economic view, it was a bad idea
to have an infrastructure to uphold the tradition of free trade which is now provided by
international trade law and legal measures, (Beck, 2018). Reasons for worry in international
trade relations from many centuries have been the same as the challenging legal plans of free
trade and associated fair trade. A theory whose possibility is inevitably related with
supportive actions are routinely dealt by political scientists and judges which is clearly more
unstructured than the concept that international economist struggled to define, (Boin, Stern,
and Sundelius, 2016). Tariff decrease is inseparably linked with national income and policies
that are calculated to reduce tariffs essentially take such a link seriously. Rise in nationwide
productivity are needed to decrease tariffs and increase the probability to import.
No theory of international trade can broadly agree with the unrestricted inflows and
outflows of goods and services even though mercantilist trade theory relied on limitations
for economic and political power. When the achievement of precious metals and
attentiveness of wealth were critical for military power and control of huge empires,
Mercantilism increased appeal in that era, (Hopkins, 2019). However, as society progressed on
the timeline of modernity and critical thinking, it became superficial that the concentration
of wealth is an unsustainable self‐destructive theory of trade (heckscher, 2007).
“David Hume created what has become known as the ‘specie-flow’ theory of the movement of
money and goods between nations to assure equilibrium among international prices and the
distribution of commodity or money among countries that are trading with each other” (Hume,
2016), pointed critique of protective trade and mercantilist theory. He pointed out that the
excess of precious metals was definitely pointless and inflationary because money in form of
coins or precious metals put an upward pressure on domestic prices and which will force
consumers to buy cheaper goods elsewhere and that causes outflow of money or bullion as well
as the exports will fall.
The British economist Adam smith popularized the theory of ‘laissez‐faire’ to hold free trade,
improvement of national welfare, and national wealth attainment, which was given by the French
physiocrats of the eighteenth century who realised the drawbacks of heavy regulated trade.
The physiocrats further argued that the role was, government should be very limited by the
establishment of a standing territorial army for common defense, a large measure to the
facility of public goods, and the efficient functioning of markets by enforcement of
contracts (Schumacher, 2012).
(Ricardo, 2017) In 1817, David Ricardo anticipated free trade based on comparative
advantage, a theory that puts up exchange even when a nation is efficient in the production
of many goods. Even though it was inadequately explained, the theory survived. The theory

says that if the country produces the least costly goods and specializes in its trade can still
be beneficial. (Haberler, 1936)The law of comparative cost or opportunity cost was
presented by Haberler, it had modern variations and though it exists because the new
dilemmas were uncovered and new rationale for explaining trade provided price equilibrium
and globalization.
“The term ‘free trade’ is believed to have originated at the end of the sixteenth century in
the parliamentary debates over foreign trade monopolies” (Irwin, 1996). Modern trade law
(post‐1940s) has been formed by technological innovation, growth of the service sector, and the
want to guard holding or monopoly rights in a very far more pointed means. Throughout the lag
of the globe Wars, the come to advocate policies became far more real than unreal and bilateral
trade treaties coexisted with trade discrimination. At the Allied Economic Conference in 1916,
Britain, France, and Italia indicated that they might not extend MFN treatment to European
country. Table I shows that except for some European countries, like European nation, Denmark,
and the GB tariffs were comparatively high in a very variety of states between 1913 and 1925.
In 1930, the USA joined within the race to protection with the passage of the Smoot‐Hawley Act
and between 1929 and 1932 trade shrunk by concerning 60 % (WTO, 2007). Beneath the Smoot‐
Hawley Act, United States average tariffs rose to 53 % on protected imports. The legislation
caused retributory tariffs from commerce partners of the USA. The murky and turbulent trade
relations ushered in a very amount of competitive devaluation (a deliberate reduction in currency
value) to extend exports and counter advocate policies by alternative nations. As nations tried to
export their state the worth of gold reserves as a hedge against competitive devaluation
hyperbolic significantly and most interchange reserves in currency were eliminated.
The incurable consequences of trade‐wars heightened the will for trade relaxation when 1932.
The legislature passed the Reciprocal Trade Agreement Act in 1934 that gave the United States
president authority to barter bilateral trade agreements. Between 1934 and 1947, the United
States entered into 32 mutual tariff agreements that caused the common level of tariffs to fall to
concerning 1/2 the 1934 levels (Carbaugh, 2009). A replacement triangular regime needed a
money and trade design which will be far more stable.
Country 1913 1925 2008 Percentage of
change
Argentina 26 26 33.3 28
Australia 17 25 8 -53
Belgium 6 8 - -
Canada 18 16 15.5 -14
Denmark 9 6 - -
France 18 12 - -
Spain 33 44 - -
Sweden 16 13 - -
UK - 4 - -
USA 33 29 5.5 -83
Table 2.1. Applied percentage tariff rates of major trades in all products.

Source: WTO (2007, p. 41); WTO.org (percentage change by author)
2.3 Globalization:
Globalization is complex so it is hard to measure it. There are two ways: First, many relevant
facts are being introduced with the increase in Social interactions, political, cross-national
cultural and economic interactions such as, financial trade, migration, investment flows,
performance of multinational companies and commercial. Second, increasing the openness of
countries is not the only option, but developing a network between individuals at a distance apart
is of utmost importance, which represents a radical elimination of every possibility of remoteness
(Ivan Arribas, 2009).
In 1960s an early picture of this process was suggested by (M. McLuhan, 1968), mentioning
the formation of an international community in which public areas are eliminated and people
should learn to live closely with those who were formerly at distant. The standards are needed to
describe a world where limits and distance does not matter, and geographical aspects are
unrelated to decide at what pace we are approaching the situation. A Standard of Perfect
International Integration (SPII) is suggested by the objective and suggestions made by (Frankel,
2000) which explains the conditions under which the world economy world operate as a
international community. Attainment of complete and purely unbiased linking of economies with
improvement of the network of connections, but also requires countries to be more open to set a
benchmark which signifies this standard. To evaluate the gap that divides the situation of
complete globalization with the present intensity of international economic integration, the
highest value of globalization should be illustrated in this situation (Ivan Arribas, 2009)
2.4 Oil and Gas:
In the global economy, Oil is important for every country’s energy security and has significant
position for a long time. Yet, more than 85% of oil resources are used by only 5% of countries
due to the imbalance in the distribution of oil resources, (Kahia, Aïssa, and Lanouar, 2017). This
has affected the oil trade in most oil- consuming countries, to become a crucial way to meet
domestic oil demand. There has been a dramatic change in the oil trade patterns since the 21st
century. In emerging economies, there is a strong demand for oil in Asian-pacific region,
especially China and India. Moreover, the multilateral trade patterns are concerned, the three
major oil-consuming areas, the Asian-Pacific region, North America and Europe are emerging
(Q. Ji, 2014). Due to these changes, the oil importers are facing more oil uncertainty and their
competitive relationships are becoming more intricate. If there will be some adjustments in the
current energy situations, the situation between oil importers will change, which in turn will
evolve the oil trading competition. To master the new rules of global oil trades, grasping the laws
of its evaluation and recognizing the dynamic and competitive relationship is crucial for oil
importers in the complex global oil trade system. Moreover, it also guarantees the world energy
security, (Wolf, Surroop, Singh, and Leal, 2016).