Economic growth,energy conservation and emissions reduction: A comparative analysis based on panel data for 8 Asian-Pacific countries

This study was conducted to evaluate the causality between energy consumption, GDP growth and carbon emissions for eight Asia-Pacific countries from 1971 to 2005 using the panel data. The results indicate that there are long-run equilibrium relationships between these variables. Additionally, causality from energy consumption to CO₂ emissions was observed generally, but there were some opposite relationships also. Parameter estimations of the panel data model indicate that there are great differences in the carbon emissions, the efficiencies of energy use, carbon emissions of unit GDP and unit energy consumption between developed and developing countries. The base carbon emissions, per capita energy consumption and efficiency of energy use in developing countries are far lower than in developed countries; however, the CO₂ emissions per unit of energy use is higher. Although developing countries may reduce their CO₂ emission per unit energy use, total energy consumption will rise rapidly with economic development. Thus, developing countries must determine how to undergo economic growth while conserving energy and reducing emissions. To respond to global climate change, it is necessary to develop innovative technology for energy use, transform the energy structure and conduct the clean development mechanism.     

Dynamic relationship between CO2 emissions,energy consumption and economic growth in three North African countries

This paper investigated the causal relationship between energy consumption (EC), carbon dioxide (CO₂) emissions and economic growth for three selected North African countries. It uses a panel co-integration analysis to determine this econometric relationship using data during 1980–2012. Recently developed tests for panel unit root and co-integration tests are applied. In order to test the Granger causality, a panel Vector Error Correction Model is used. The conservation hypothesis is found; the short run panel results show that there is a unidirectional relationship from economic growth to EC. In addition, there is a unidirectional causality running from economic growth to CO₂ emissions. A unidirectional relationship from EC to CO₂ emissions is detected. Findings shown that there is a big interdependence between EC and economic growth in the long run, which indicates the level of economic activity and EC mutually influence each other in that a high level of economic growth leads to a high level of EC and vice versa. Similarly, a unidirectional causal relationship from EC to CO₂ emissions is detected. This study opens up new insights for policy-makers to design comprehensive economic, energy and environmental policy to keep the economic green and a sustainable environment, implying that these three variables could play an important role in the adjustment process as the system changes from the long run equilibrium.     

Energy consumption and GDP revisited: A panel analysis of developed and developing countries

This paper applies a new panel data stationarity testing procedure, first developed by Carrion-i-Silvestre et al. [2005, Econometrics Journal 8, 159–175], with panel VARs that employ the generalized method of moment techniques in order to re-investigate the dynamic interactions between energy consumption per capita (LEC) and real GDP per capita (LRY) in 22 developed and 18 developing countries. When multiple breaks in the series are taken into account, there is convincing evidence of panel stationarity for LEC and LRY in both groups. The energy crises evidently had a substantive impact on both LEC and LRY in all sample countries. Furthermore, our panel VARs attest to bidirectional causality between LEC and LRY in developed countries, but there is uni-directional causality from LRY to LEC in developing countries. Finally, from the orthogonalized impulse response functions, all of the variables in the panel VARs have a positive effect on each other, but their impact is greater and more persistent in developing countries. Some important policy implications do emerge.     

On the relationships between CO2 emissions,energy consumption and income: The importance of time variation

The environment that governs the relationships between energy consumption, carbon dioxide (CO₂) emissions and gross domestic product (GDP) in the G7 countries changes over time due to variations in economic growth, regulatory policy and technology. Using a novel approach that may detect causalities when the time-constant hypothesis is rejected, we find significant time-varying Granger causalities among the variables under consideration. There is bidirectional causality between GDP and energy consumption for Japan, unidirectional causality running from GDP to energy consumption for Italy, and unidirectional causality running from energy consumption to GDP for the resource country Canada. Moreover, the results also show a bidirectional time-varying causality between energy consumption and CO₂ emissions for the United States, and causality from energy consumption to CO₂ emissions for France. Finally, while we find significant time-varying causalities running from GDP to CO₂ emissions for Italy and Japan, the finding of inverted N-shaped curves (Italy and Japan) lends no support to the traditional Environmental Kuznets Curve (EKC) hypothesis for these countries. It implies that environmental policy and economic growth should go hand in hand. Other policy implications of the empirical results have been proposed.     

The relationship between CO2 emissions,energy consumption and economic growth in Italy

This study examines the relationship between CO₂ emissions, energy consumption and economic growth in Italy over the period 1970–2006. Results of unit root tests show that all variables are non-stationary in their level form, but stationary in first differences form. The causal relationship between variables is examined using causality test in a vector autoregressive framework. Our empirical results show that CO₂ emissions, energy consumption and economic growth are not cointegrated. Moreover, the Toda and Yamamoto Granger non-causality test shows a bidirectional causality between CO₂ emissions and economic growth, as well as between CO₂ emissions and energy consumption. Forecast error variance decompositions evidence that the errors in real per capita GDP are mainly due to uncertainty in GDP itself, while the errors in predicting the energy consumption and the CO₂ emissions are sensitive to disturbances in the other two equations.     

Economic growth and pollutant emissions in Tunisia: An empirical analysis of the environmental Kuznets curve

This paper investigates the relationship between economic growth and pollutant emissions for a small and open developing country, Tunisia, during the period 1961–2004. The investigation is made on the basis of the environmental Kuznets curve hypothesis, using time series data and cointegration analysis. Carbon dioxide (CO₂) and sulfur dioxide (SO₂) are used as the environmental indicators, and GDP as the economic indicator. Our results show that there is a long-run cointegrating relationship between the per capita emissions of two pollutants and the per capita GDP. An inverted U relationship between SO₂ emissions and GDP has been found, with income turning point approximately equals to $1200 (constant 2000 prices) or to $3700 (in PPP, constant 2000 prices). However, a monotonically increasing relationship with GDP is found more appropriate for CO₂ emissions. Furthermore, the causality results show that the relationship between income and pollution in Tunisia is one of unidirectional causality with income causing environmental changes and not vice versa, both in the short-run and long-run. This implies that an emission reduction policies and more investment in pollution abatement expense will not hurt economic growth. It could be a feasible policy tool for Tunisia to achieve its sustainable growth in the long-run.     

Multivariate Granger causality between CO2 emissions, energy consumption, FDI (foreign direct investment) and GDP (gross domestic product): Evidence from a panel of BRIC (Brazil, Russian Federation, India, and China) countries

This paper addresses the impact of both economic growth and financial development on environmental degradation using a panel cointegration technique for the period between 1980 and 2007, except for Russia (1992-2007). In long-run equilibrium, CO₂ emissions appear to be energy consumption elastic and FDI inelastic, and the results seem to support the Environmental Kuznets Curve (EKC) hypothesis. The causality results indicate that there exists strong bidirectional causality between emissions and FDI and unidirectional strong causality running from output to FDI. The evidence seems to support the pollution haven and both the halo and scale effects. Therefore, in attracting FDI, developing countries should strictly examine the qualifications for foreign investment or to promote environmental protection through the coordinated know-how and technological transfer with foreign companies to avoid environmental damage. Additionally, there exists strong output-emissions and output-energy consumption bidirectional causality, while there is unidirectional strong causality running from energy consumption to emissions. Overall, the method of managing both energy demand and FDI and increasing both investment in the energy supply and energy efficiency to reduce CO₂ emissions and without compromising the country’s competitiveness can be adopted by energy-dependent BRIC countries.     

The causal relationship between energy consumption and GDP in Albania,Bulgaria, Hungary and Romania: Evidence from ARDL bound testing approach

The purpose of this study is to investigate the causal relationship between energy and economic growth in Albania, Bulgaria, Hungary and Romania from 1980 to 2006 by employing energy use per capita, electric power consumption per capita and real GDP per capita variables. To examine this linkage, we use the two-step procedure from the Engle and Granger model: In first step, we explore the long-run relationships between the variables by using recently developed autoregressive distributed lag (ARDL) bounds testing approach of cointegration. Secondly, we employ a dynamic vector error correction (VEC) model to test causal relationships between variables. The bounds test yields evidence of a long-run relationship between energy use per capita and real GDP per capita and evidence of two-way (bidirectional) strong Granger causality between these variables only in Hungary. On the other hand, the ARDL bounds test results show that there is no a unique long-term or equilibrium relationship between energy consumption variables and real GDP per capita in Albania, Bulgaria and Romania. In other words, no cointegration exists between these variables in these three countries. The econometric analysis suggests that any causal relationships within dynamic error correction model for Albania, Bulgaria and Romania cannot be estimated.     

CO2 emissions,energy consumption and economic growth in the ASEAN-5 countries: A cross-sectional dependence approach

We re-examine the relationship between CO2 emissions, energy consumption (EC) and economic growth (GDP) for the five main Association of Southeast Asian Nations (ASEAN-5) countries over the period 1980–2016. Our main contention is that the findings in previous studies that have examined the relationship between CO2, EC and GDP in the ASEAN-5 are biased because they fail to account for cross-sectional dependence (CD). We show that conventional tests applied to our dataset suggest a misleading conclusion about the Environmental Kuznets Curve (EKC) and Granger causal relationship between CO2, EC and GDP in the presence of CD. When we apply a new panel test of Granger non-causality that addresses CD and heterogeneity, we find considerable heterogeneity. We find unidirectional Granger causality running from GDP to CO2 for Malaysia, the Philippines, Singapore and Thailand; unidirectional causality running from GDP to EC in Indonesia, Malaysia and Thailand; unidirectional causality running from EC to GDP in Singapore and bidirectional causality between GDP and EC in the Philippines. We also find support for the EKC hypothesis for the ASEAN-5 countries.     

CO2 emissions,energy usage,and output in Central America

This study extends the recent work of Ang (2007) [Ang, J.B., 2007. CO₂ emissions, energy consumption, and output in France. Energy Policy 35, 4772–4778] in examining the causal relationship between carbon dioxide emissions, energy consumption, and output within a panel vector error correction model for six Central American countries over the period 1971–2004. In long-run equilibrium energy consumption has a positive and statistically significant impact on emissions while real output exhibits the inverted U-shape pattern associated with the Environmental Kuznets Curve (EKC) hypothesis. The short-run dynamics indicate unidirectional causality from energy consumption and real output, respectively, to emissions along with bidirectional causality between energy consumption and real output. In the long-run there appears to be bidirectional causality between energy consumption and emissions.     

The long-run and causal analysis of energy,growth, openness and financial development on carbon emissions in Turkey

The aim of this paper is to examine the causal relationship between financial development, trade, economic growth, energy consumption and carbon emissions in Turkey for the 1960–2007 period. The bounds F‐test for cointegration test yields evidence of a long-run relationship between per capita carbon emissions, per capita energy consumption, per capita real income, the square of per capita real income, openness and financial development. The results show that an increase in foreign trade to GDP ratio results an increase in per capita carbon emissions and financial development variable has no significant effect on per capita carbon emissions in the long- run. These results also support the validity of EKC hypothesis in the Turkish economy. It means that the level of CO₂ emissions initially increases with income, until it reaches its stabilization point, then it declines in Turkey. In addition, the paper explores causal relationship between the variables by using error-correction based Granger causality models.     

CO2 emissions,energy consumption and economic growth in BRIC countries

This paper examines dynamic causal relationships between pollutant emissions, energy consumption and output for a panel of BRIC countries over the period 1971–2005, except for Russia (1990–2005). In long-run equilibrium energy consumption has a positive and statistically significant impact on emissions, while real output exhibits the inverted U-shape pattern associated with the Environmental Kuznets Curve (EKC) hypothesis with the threshold income of 5.393 (in logarithms). In the short term, changes in emissions are driven mostly by the error correction term and short term energy consumption shocks, as opposed to short term output shocks for each country. Short-term deviations from the long term equilibrium take from 0.770 years (Russia) to 5.848 years (Brazil) to correct. The panel causality results indicate there are energy consumption–emissions bidirectional strong causality and energy consumption–output bidirectional long-run causality, along with unidirectional both strong and short-run causalities from emissions and energy consumption, respectively, to output. Overall, in order to reduce emissions and not to adversely affect economic growth, increasing both energy supply investment and energy efficiency, and stepping up energy conservation policies to reduce unnecessary wastage of energy can be initiated for energy-dependent BRIC countries.     

Energy consumption and economic growth: The case of oil exporting countries

This paper examines the causal relationship between the per capita energy consumption and the per capita GDP in a panel of 11 selected oil exporting countries by using panel unit-root tests and panel cointegration analysis. The results show a unidirectional strong causality from economic growth to energy consumption for the oil exporting countries. The findings have practical policy implications for decision makers in the area of macroeconomic planning. In most major oil exporting countries, government policies keep domestic prices bellow free market level, resulting in high levels of domestic energy consumption. The results imply that the energy conservation through reforming energy price policies has no damaging repercussions on economic growth for this group of countries.     

CO2 emissions,energy consumption and economic growth in Turkey

This paper examines the long run and causal relationship issues between economic growth, carbon emissions, energy consumption and employment ratio in Turkey by using autoregressive distributed lag bounds testing approach of cointegration. Empirical results for Turkey over the period 1968–2005 suggest an evidence of a long-run relationship between the variables at 5% significance level in Turkey. The estimated income elasticity of carbon emissions per capita is ?0.606 and the income elasticity of energy consumption per capita is 1.375. Results for the existence and direction of Granger causality show that neither carbon emissions per capita nor energy consumption per capita cause real GDP per capita, but employment ratio causes real GDP per capita in the short run. In addition, EKC hypothesis at causal framework by using a linear logarithmic model is not valid in Turkish case. The overall results indicates that energy conservation policies, such as rationing energy consumption and controlling carbon dioxide emissions, are likely to have no adverse effect on the real output growth of Turkey.     

The pollution concern in the era of globalization: Do the contribution of foreign direct investment and trade openness matter?

This analysis aims to treat the contribution of the foreign direct investment inflows and trade openness to environmental degradation. Drawing on the data for 27 African countries over the period from 1990 to 2013, we develop an empirical model based on a set of panel methods. This approach includes Westerlund (2007) panel cointegration technic, Common Correlated Effects Mean Group (CCE-MG) estimation procedure, and the Granger causality test. In terms of long-term causality, our findings reveal bidirectional long-term causality between CO₂/NO_x emissions, GDP, trade openness, and foreign direct investment. Besides, in the short-run, the results recorded a unidirectional causality running from GDP to CO₂, and from FDI to CO₂. However, bidirectional causality nexus was detected between trade openness and CO₂. Additionally, the findings portray bidirectional causality between GDP and NO_x and between trade openness and NO_x, while a unidirectional causality from foreign direct investment to NO_x. Our analysis substantiates the importance of the foreign direct investment inflows and trade openness in mitigating the adverse effect of heavy pollutant activities and resolving the environmental puzzle (growing without polluting) consistent with the Millennium Development Goals (MGDs) of the UN background.     

Energy consumption and GDP in Tunisia: Cointegration and causality analysis

In this paper, the Johansen cointegration technique is used to examine the causal relationship between per capita energy consumption (PCEC) and per capita gross domestic product (PCGDP) for Tunisia during the 1971–2004 period. In order to test for Granger causality in the presence of cointegration among the variables, a vector error correction model (VECM) is used instead of a vector autoregressive (VAR) model. Our estimation results indicate that the PCGDP and PCEC for Tunisia are related by one cointegrating vector and that there is a long-run bi-directional causal relationship between the two series and a short-run unidirectional causality from energy to gross domestic product (GDP). The source of causation in the long-run is found to be the error-correction terms in both directions. Hence, an important policy implication resulting from this analysis is that energy can be considered as a limiting factor to GDP growth in Tunisia. Conclusions for Tunisia may also be relevant for a number of countries that have to go through a similar development path of increasing pressure on already scarce energy resources.     

CO2 emissions,nuclear energy,renewable energy and economic growth in the US

This study explores the causal relationship between carbon dioxide (CO₂) emissions, renewable and nuclear energy consumption and real GDP for the US for the period 1960–2007. Using a modified version of the Granger causality test, we found a unidirectional causality running from nuclear energy consumption to CO₂ emissions without feedback but no causality running from renewable energy to CO₂ emissions. The econometric evidence seems to suggest that nuclear energy consumption can help to mitigate CO₂ emissions, but so far, renewable energy consumption has not reached a level where it can make a significant contribution to emissions reduction.     

The CO2 emissions-income nexus: Evidence from rich countries

The paper attempts to test the Environment Kuznets Curve (EKC) hypothesis for 36 high-income countries for the period 1980–2005. The test is based on the suggestion of Narayan and Narayan (2010). Various panel data unit root and co-integration tests are applied. Carbon dioxide (CO₂) emissions and GDP series are integrated of order one and co-integrated, especially after controlling for cross-sectional dependence. Additionally, the Blundell–Bond system generalised methods of moments (GMM) is employed to conduct a panel causality test in a vector error-correction mechanism (VECM) setting. Unidirectional causality running from real per capita GDP to per capita CO₂ emissions is uncovered in both the short-run and the long-run. The empirical analysis based on individual countries provides evidence of an EKC for Greece, Malta, Oman, Portugal and the United Kingdom. However, it can be observed that for the whole panel, a 1% increase in GDP generates an increase of 0.68% in CO₂ emissions in the short-run and 0.22% in the long-run. The lower long-run income elasticity does not provide evidence of an EKC, but does indicate that, over time, CO₂ emissions are stabilising in the rich countries.     

The emissions,energy consumption,and growth nexus: Evidence from the commonwealth of independent states

This study examines the causal relationship between carbon dioxide emissions, energy consumption, and real output within a panel vector error correction model for eleven countries of the Commonwealth of Independent States over the period 1992–2004. In the long-run, energy consumption has a positive and statistically significant impact on carbon dioxide emissions while real output follows an inverted U-shape pattern associated with the Environmental Kuznets Curve (EKC) hypothesis. The short-run dynamics indicate unidirectional causality from energy consumption and real output, respectively, to carbon dioxide emissions along with bidirectional causality between energy consumption and real output. In the long-run there appears to be bidirectional causality between energy consumption and carbon dioxide emissions.     

Growth and renewable energy in Europe: A random effect model with evidence for neutrality hypothesis

This is an empirical study on the causal relationship between economic growth and renewable energy for 27 European countries in a multivariate panel framework over the period 1997-2007 using a random effect model and including final energy consumption, greenhouse gas emissions and employment as additional independent variables in the model. Empirical results do not confirm causality between renewable energy consumption and GDP, although panel causality tests unfold short-run relationships between renewable energy and greenhouse gas emissions and employment. The estimated cointegration factor refrains from unity, indicating only a weak, if any, relationship between economic growth and renewable energy consumption in Europe, suggesting evidence of the neutrality hypothesis, which can partly be explained by the uneven and insufficient exploitation of renewable energy sources across Europe.