Determinants of carbon dioxide emissions: Empirical evidence from 69 countries

This study investigates the determinants of carbon dioxide emissions (CO₂) for a global panel consisting of 69 countries using a dynamic panel data model. To make the panel data analysis more homogenous, we also investigate the determinants of CO₂ emissions for a number of sub-panels. These sub-panels are constructed based on the income level of countries. In this way, we end up with three income panels; namely, high income, middle income, and low income panels. The time component of our dataset is 1985–2005 inclusive. Our main findings are that trade openness, per capita GDP, and energy consumption, proxied by per capita electric power consumption and per capita total primary energy consumption, have positive effects on CO₂ emissions. Urbanisation is found to have a negative impact on CO₂ emissions in high income, middle income, and low income panels. For the global panel, only GDP per capita and per capita total primary energy consumption are found to be statistically significant determinants of CO₂ emission, while urbanisation, trade openness, and per capita electric power consumption have negative effects on the CO₂ emissions.     

Carbon dioxide emissions and trade: Evidence from disaggregate trade data

The relationship between trade and environmental quality is a major controversial issue. The paper intends to provide robust evidence and new insights into the discussion. Specifically, it examines the effect of trade on carbon dioxide emissions (CO₂) systematically in a North-North, North-South, South-North, and South-South context. It employs a panel data instrumental-variable quantile approach to control for endogeneity and account for potential (quantile) parameter heterogeneity. Some important results emerge. First, trade with the North increases CO₂ emissions whereas trade with the South mitigates CO₂ emissions with a relatively larger effect for less polluted host countries. Second, for advanced countries, their trade with the South or the North leads to a reduction in CO₂ emissions, the effect that seems relatively stronger for less polluted advanced countries. Third, for developing countries, their trade with the North worsens CO₂ emissions whereas their trade with the South mitigates CO₂ emissions with a larger effect for less polluted developing countries. Last, the environmental Kuznets hypothesis is also detected across quantiles for the full sample and both developing and advanced countries subsamples. The findings suggest that trade benefits the advanced countries but could hurt the developing countries when trade with high-income trading partners occurs, in terms of CO₂ emissions.     

Carbon dioxide emission,institutional quality,and economic growth: Empirical evidence in Malaysia

In view of Malaysia's status as a fast-growing economy with accelerating carbon dioxide emissions, a better understanding of the relationship between economic growth and pollution is vital to the policy makers. This paper, therefore, attempts to investigate the existence of long run relationship among carbon dioxide emission, institutional quality, exports, and economic growth and further examines the causal relationship among these variables in Malaysia for the period 1984–2008. From the bounds test, it is found that a long run relationship does exist among the variables, even using different conditioning information sets. A positive and significant interaction term between carbon dioxide emission and institutional quality indicator (i.e. law and order) implies that good institutional quality is important in controlling carbon dioxide emission in the process of economic development. The results for Granger causality tests further confirm the importance of institutional frameworks in reducing carbon dioxide emissions since institutional quality is found not only affects economic growth directly, but also indirectly via carbon dioxide emissions. This indicates that sound institutional frameworks are essential for Malaysia to achieve high economic growth without sacrificing its environment.     

The relationship between energy consumption, energy prices and economic growth: time series evidence from Asian developing countries

This paper estimates the causal relationships between energy consumption and income for India, Indonesia, the Philippines and Thailand, using cointegration and error-correction modelling techniques. The results indicate that, in the short-run, unidirectional Granger causality runs from energy to income for India and Indonesia, while bidirectional Granger causality runs from energy to income for Thailand and the Philippines. In the case of Thailand and the Philippines, energy, income and prices are mutually causal. The study results do not support the view that energy and income are neutral with respect to each other, with the exception of Indonesia and India where neutrality is observed in the short-run.     

The relationship between energy and economic growth: Empirical evidence from 66 countries

In this study, we use dynamic panel data models to examine the impact of electricity and non-electricity variables on economic growth for a global panel consisting of 66 countries. The time component of our dataset is 1986–2005 inclusive. We also estimate this relationship for four regional panels; namely, East/South Asian and the Pacific region, Europe and Central Asian region, Latin America and Caribbean region, and Sub-Saharan, North Africa and Middle Eastern region. In total, we use six proxies for energy. The empirical analysis is based on a sound theoretical framework, in that we draw on growth theory and augment the classical growth model, which consists of inflation, capital stock, labour force and trade, with energy. Generally, the results on the impact of energy are mixed.     

Modeling the nexus between carbon dioxide emissions and economic growth

The effects of economic growth on the environment have received increased attention as global warming and other environmental problems become more serious. Many empirical studies explain the nexus between carbon dioxide emissions and economic growth with such models as the environmental Kuznets curve (EKC) theory. However, the assumptions of these models have never received strict verification with a large available data set and therefore may not be appropriate to describe the relationship. In this study, the nexus is modeled for 67 countries from 1971 to 2010 using a novel symbolic regression method. From the experimental results, several conclusions as follows could be reached. Firstly, there is no universal model fitting every country, and symbolic regression could discover a set of reasonable models for a specific country or region. Secondly, four models, including the inverted N-shaped, M-shaped, inverted U-shaped and monotonically increasing, are frequently found without domain experts’ intervention in these countries, whereas the M-shaped model has received little attention in previous studies but exhibits promising performance. Thirdly, the relationship is diversified due to the difference of regions and economic development, where developed countries generally follow the inverted N-shaped and M-shaped models to explain the relationship, whereas developing countries are more likely to refer to the inverted N-shaped, inverted U-shaped and monotonically increasing models. Finally, several policy suggestions are presented.     

An innovative indicator of carbon dioxide emissions for developing countries: A study of Taiwan

Ever since the Kyoto Protocol entered into force, the issues of climate change and greenhouse gas (GHG) emissions have drawn more and more attention globally. However, the major concern of the Kyoto Protocol to reduce the overall GHG emissions might be inaccessible for most developing countries, which rely heavily on the energy-intensive industries for exports and economic growth. In this study, an innovative indicator of net carbon dioxide (CO₂) emissions, which excludes the emissions corresponding to the exports, is proposed to explicitly reveal domestic situations of developing countries. By introducing the indicator of net CO₂ emissions to top five energy-intensive industries in Taiwan, the analysis indicates that the increase in CO₂ emissions from 1999 to 2004 is mostly contributed by the expanded exports rather than the domestic demand. The distinct growth patterns of the apparent and net CO₂ emissions also imply the transformation of the industrial sector. It is expected that, for developing countries, the concept of net emissions may not only serve as a proper interim target during the process of international negotiations over GHG reductions but also highlights the prominence of addressing the emissions from the industrial sector as the top priority.     

CO2 emissions,energy consumption and economic growth nexus in MENA countries: Evidence from simultaneous equations models

This paper examines the nexus between CO₂ emissions, energy consumption and economic growth using simultaneous-equations models with panel data of 14 MENA countries over the period 1990–2011. Our empirical results show that there exists a bidirectional causal relationship between energy consumption and economic growth. However, the results support the occurrence of unidirectional causality from energy consumption to CO₂ emissions without any feedback effects, and there exists a bidirectional causal relationship between economic growth and CO₂ emissions for the region as a whole. The study suggests that environmental and energy policies should recognize the differences in the nexus between energy consumption and economic growth in order to maintain sustainable economic growth in the MENA region.     

Energy consumption and economic growth relationship: Evidence from panel data for low and middle income countries

This paper uses the panel data of energy consumption (EC) and economic growth (GDP) for 51 countries from 1971 to 2005. These countries are divided into three groups: low income group, lower middle income group and upper middle income group countries. Firstly, a relationship between energy consumption and economic growth is investigated by employing Pedroni (1999) panel cointegration method. Secondly, panel causality test is applied to investigate the way of causality between the energy consumption and economic growth. Finally, we test whether there is a strong or weak relationship between these variables by using Pedroni (2001) method. The empirical results of this study are as follows: i) Energy consumption and GDP are cointegrated for all three income group countries. ii) The panel causality test results reveal that there is long-run Granger causality running from GDP to EC for low income countries and there is bidirectional causality between EC and GDP for middle income countries. iii) The estimated cointegration factor, β, is not close to 1. In other words, no strong relation is found between energy consumption and economic growth for all income groups considered in this study. The findings of this study have important policy implications and it shows that this issue still deserves further attention in future research.     

Electricity consumption and economic growth: evidence from Korea

This paper investigates the short- and long-run causality issues between electricity consumption and economic growth in Korea by using the co-integration and error-correction models. It employs annual data covering the period 1970–2002. The overall results show that there exists bi-directional causality between electricity consumption and economic growth. This means that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption.     

Return on investment from industrial energy efficiency: evidence from developing countries

Energy efficiency is a foundation of any good energy policy. The economic, security, and environmental benefits of energy efficiency have been recognized for decades. We explore energy efficiency investments derived from survey work in developing countries in 119 projects across nine manufacturing subsectors. The methodology utilizes financial return calculations to highlight gaps and opportunities for meeting the potential of energy efficiency projects in the manufacturing sector. We find a generally very high level of internal rates of return at a project level—with payback periods ranging from 0.9 to 2.9 years; but note that these metrics do not always appropriately influence corporate decision-making for a number of well-understood reasons.     

Decomposing drivers of transportation energy consumption and carbon dioxide emissions for the Philippines: the case of developing countries

Global CO₂ emissions increased by 57.9% from 1990 to 2014, of which 21% is known to be from the transportation sector. In line with policy development, driving forces to energy consumption and emissions may be determined using decomposition analysis techniques. However, the detail of information required to perform such studies for the transportation sector in developing countries can be challenging. An attempt was made in this study to formulate a decomposition analysis framework considering data availability and limitation in developing countries. Furthermore, a suggestion of adjusting transport activity data using average oil price was proposed. An illustrative case study in the Philippines revealed that the most significant driver was transport activity, followed by energy intensity, and then population growth, which was both similar and contrary to all previous studies performed in developed and rapidly urbanizing countries, which pointed out to transport activity as the primary contributing force. For the Philippines, transport activity was an inhibiting force, whereas energy intensity was the primary contributing factor. The difference could be explained by the differences in mode shares and quality of life between countries. Looking at private vehicle ownership data, it is observed that growth rates are higher in the rural, than in the urban centers. Deriving from the findings, developing a comprehensive public transport plan is recommend for future growth areas, expansion and modernization of public transport services in the city, and strategic deployment of transport policies.     

The relationship between pollutant emissions,renewable energy,nuclear energy and GDP: empirical evidence from 18 developed and developing countries

This document investigates the causal relationship between nuclear energy (NE), pollutant emissions (CO₂ emissions), gross domestic product (GDP) and renewable energy (RE) using dynamic panel data models for a global panel consisting of 18 countries (developed and developing) covering the 1990–2013 period. Our results indicate that there is a co-integration between variables. The unit root test suggests that all the variables are stationary in first differences. The paper further examines the link using the Granger causality analysis of vector error correction model, which indicates a unidirectional relationship running from GDP per capita to pollutant emissions for the developed and developing countries. However, there is a unidirectional causality from GDP per capita to RE in the short and long run. This finding confirms the conservation hypothesis. Similarly, there is no causality between NE and GDP per capita.     

Energy consumption,prices and economic growth in three SSA countries: A comparative study

In this paper we examine the causal relationship between energy consumption and economic growth in three sub-Saharan African countries, namely South Africa, Kenya and Congo (DRC). We incorporate prices as an intermittent variable in a bivariate setting between energy consumption and economic growth—thereby creating a simple trivariate framework. Using the ARDL-bounds testing procedure, we find that the causality between energy consumption and economic growth varies significantly across the countries under study. The results show that for South Africa and Kenya there is a unidirectional causal flow from energy consumption to economic growth. However, for Congo (DRC) it is economic growth that drives energy consumption. These findings have important policy implications insofar as energy conservation policies are concerned. In the case of Congo (DRC), for example, the implementation of energy conservation policies may not significantly affect economic growth because the country's economy is not entirely energy dependent. However, for South Africa and Kenya there is a need for more energy supply augmentations in order to cope with the long-run energy demand. In the short-run, however, the two countries should explore more efficient and cost-effective sources of energy in order to address the energy dependency problem.     

Panel estimation for CO2 emissions,energy consumption,economic growth,trade openness and urbanization of newly industrialized countries

This paper empirically examines the dynamic causal relationships between carbon dioxide emissions, energy consumption, economic growth, trade openness and urbanization for the panel of newly industrialized countries (NIC) using the time series data for the period 1971–2007. Using four different panel unit root tests it is found that all panel variables are integrated of order 1. From the Johansen Fisher panel cointegration test it is found that there is a cointegration vector among the variables. The Granger causality test results support that there is no evidence of long-run causal relationship, but there is unidirectional short-run causal relationship from economic growth and trade openness to carbon dioxide emissions, from economic growth to energy consumption, from trade openness to economic growth, from urbanization to economic growth and from trade openness to urbanization. It is found that the long-run elasticity of carbon dioxide emissions with respect to energy consumption (1.2189) is higher than short run elasticity of 0.5984. This indicates that over time higher energy consumption in the newly industrialized countries gives rise to more carbon dioxide emissions as a result our environment will be polluted more. But in respect of economic growth, trade openness and urbanization the environmental quality is found to be normal good in the long-run.     

Pollution and economic growth: Evidence from Central and Eastern European countries

We investigate the relationships between pollution and growth in eleven Central and Eastern European (CEE) countries. Aggregate results, robust to different estimators and control variables, reveal an increasing nonlinear link between GDP and CO2 for the group of CEE countries. However, at a disaggregated, country-level, the relationship between GDP and CO2 is characterized by much diversity among CEE countries, namely: N-shaped, inverted-N, U-shaped, inverted-U, monotonic, or no statistical link. Thus, despite an aggregated upward trend, some CEE countries managed to secure both higher GDP and lower CO2 emissions. From a policy perspective, EU policymakers could pay more attention to these countries, and amend the current unique environmental policy to account for country-heterogeneities in order to support economic growth without damaging the environment.     

Exploring the relationship between energy use and economic growth with bivariate models: New evidence from G-7 countries

There is a rapidly growing literature on the interaction between energy use and economic development, with many analysts drawing policy conclusions on the basis of Granger causality tests that involve only an energy and an economic variable. This paper attempts to demonstrate empirically that such studies, although useful for certain applications, may be of limited use for policy purposes. After outlining theoretical and methodological issues associated with such approaches, I apply bivariate energy–economy causality tests for Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, using aggregate and sectoral data and three different modern econometric methods. The results, which are often contradictory or economically implausible, illustrate explicitly that one should be cautious when drawing policy implications with the aid of bivariate causality tests on small samples. I therefore underline the importance of utilizing as large sample sizes as possible and using multivariate models, which are closer to economic theory, accommodate several mechanisms and causality channels and provide a better representation of real-world interactions between energy use and economic growth.     

Energy deprivation dynamics and regulatory reforms in Europe: Evidence from household panel data

The typical ingredients of energy reforms in the European Union (EU) in the 1990s were full or partial privatization, vertical disintegration and liberalization. This paper analyses the effects of energy reforms on the probability of households experiencing deprivation, defined as difficulty in paying the bills. We use two sets of micro-data. First, the European Community Household Panel (ECHP), a large EU survey, offers evidence on people who report having been unable to pay scheduled utility bills. We consider seven European countries: Denmark, Belgium, France, Ireland, Italy, the Netherlands and Spain, and eight ECHP waves (1994–2001), with around 28,000 observations. Second, we also use micro-data from the European Statistics on Income and Living Conditions survey (EU-SILC) 2004–2005, with around 84,000 observations. The countries included are Belgium, France, Ireland, Italy, Spain, Austria, Finland, Luxembourg, Norway and Sweden. As indicators of regulatory reforms in the same countries and years we use ECTR (formerly REGREF), a database provided by the OECD. In both samples we find evidence that privatization increases the probability of households experiencing deprivation. Vertical disintegration has a similar effect and also increases the persistence in the status of household deprivation. Liberalization has no statistically significant effect. We discuss possible interpretations of these findings.     

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.     

Renewable and non-renewable energy consumption and economic activities: Further evidence from OECD countries

This article examines the dynamic relationship between renewable and non-renewable energy consumption and industrial output and GDP growth in OECD countries using data over the period of 1980–2011. The panel cointegration technique allowing structural breaks is used for empirical investigation. The results show that there is a long-term equilibrium relationship among non-renewable and renewable energy sources, industrial output and economic growth. The panel causality analyses show bidirectional causality between industrial output and both renewable and non-renewable energy consumption in the short and long run. However, there is evidence of bidirectional short-run relationship between GDP growth and non-renewable energy consumption while unidirectional causality between GDP growth and renewable energy consumption. These results indicate that OECD economies still remain energy-dependent for their industrial output as well as overall economic growth. However, expansion of renewable energy sources is a viable solution for addressing energy security and climate change issues, and gradually substituting renewable to non-renewable energy sources could enhance a sustainable energy economy.