Electricity consumption and economic growth in seven South American countries

This paper attempts to investigate the causal relationship between electricity consumption and economic growth among seven South American countries, namely Argentina, Brazil, Chile, Columbia, Ecuador, Peru, and Venezuela using widely accepted time-series techniques for the period 1975–2006. The results indicate that the causal nexus between electricity consumption and economic growth varies across countries. There is a unidirectional, short-run causality from electricity consumption to real GDP for Argentina, Brazil, Chile, Columbia, and Ecuador. This means that an increase in electricity consumption directly affects economic growth in those countries. In Venezuela, there is a bidirectional causality between electricity consumption and economic growth. This implies that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption in that country. However, no causal relationships exist in Peru. The documented evidence from seven South American countries can provide useful information for each government with regard to energy and growth policy.     

The impact of coal consumption and CO2 emission on economic growth

This study examined the long-run and the causal relationship between total coal consumption, CO₂ emission, and GDP growth in China, the United States, India, Germany, Russia, South Africa, Japan, Australia, Poland, and South Korea. The panel model was employed during the period 1992–2009. The results showed that total coal consumption and CO₂ emission have a long-run relationship with the GDP growth. In addition, there was a short-run positive bidirectional causal relationship between total coal consumption and CO₂ emission. However, total coal consumption and CO₂ emission have no short-run or long-run causal relationship with GDP growth. Thus energy conservation policies on total coal consumption such as rationing energy consumption and controlling CO₂ emissions are likely to have no negative impact on the real output growth of the investigated countries.     

Coal consumption and economic growth revisited

This paper revisits the causal relationship between coal consumption and real GDP for six major coal consuming countries for the period 1965–2005 within a vector autoregressive (VAR) framework by including capital and labour as additional variables. Applying a modified version of the Granger causality test due to Toda and Yamamoto [Toda HY, Yamamoto T. Statistical inference in vector autoregressions with possibly integrated process. J Econom 1995;66:225–50], we found a unidirectional causality running from coal consumption to economic growth in India and Japan while the opposite causality running from economic growth to coal consumption was found in China and South Korea. In contrast there was a bi-directional causality running between economic growth and coal consumption in South Africa and the United States. Variance decomposition analysis seems to confirm our Granger causality results. The policy implication is that measures adopted to mitigate the adverse effects of coal consumption may be taken without harming economic growth in China and South Korea. In contrast, for the remaining four countries conservation measures can harm economic growth.     

The causal relationship between electricity consumption and economic growth in the ASEAN countries

This paper investigates the causal relationship between electricity consumption and economic growth among the Association of South East Asian Nations (ASEAN) 4 members, namely Indonesia, Malaysia, Singapore, and Thailand, using modern time-series techniques for the period 1971–2002. The results indicate that there is a bi-directional causality between electricity consumption and economic growth in Malaysia and Singapore. This means that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption in the two countries. However, uni-directional causality runs from economic growth to electricity consumption in Indonesia and Thailand without any feedback effect. Thus, electricity conservation policies can be initiated without deteriorating economic side effects in the two countries.     

Electricity consumption and economic growth in South Africa: A trivariate causality test

In this paper we examine the causal relationship between electricity consumption and economic growth in South Africa. We incorporate the employment rate as an intermittent variable in the bivariate model between electricity consumption and economic growth—thereby creating a simple trivariate causality framework. Our empirical results show that there is a distinct bidirectional causality between electricity consumption and economic growth in South Africa. In addition, the results show that employment in South Africa Granger-causes economic growth. The results apply irrespective of whether the causality is estimated in the short-run or in the long-run formulation. The study, therefore, recommends that policies geared towards the expansion of the electricity infrastructure should be intensified in South Africa in order to cope with the increasing demand exerted by the country's strong economic growth and rapid industrialisation programme. This will certainly enable the country to avoid unprecedented power outages similar to those experienced in the country in mid-January 2008.     

Electricity consumption and real GDP causality nexus: Evidence from ARDL bounds testing approach for 11 MENA countries

This paper investigates the short-run and long-run causality issues between electricity consumption and economic growth in the selected 11 Middle East and North Africa (MENA) countries by using Autoregressive Distributed Lag (ARDL) bounds testing approach of cointegration and vector error-correction models. It employs annual data covering the period from 1971 to 2006. The unit root tests results indicate that some of the variables for Algeria, Jordan, Tunisia and United Arab Emirates do not satisfy the underlying assumptions of the ARDL bounds testing approach of cointegration methodology before proceeding to the estimation stage. Thus, we drop these countries from the ARDL bounds testing approach of cointegration and causality analysis. The cointegration test results show that there is no cointegration between the electricity consumption and the economic growth in three of the seven countries (Iran, Morocco and Syria). Thus, causal relationship cannot be estimated for these countries. However, the cointegration and causal relationship is found in four countries (Egypt, Israel, Oman and Saudi Arabia). The overall results indicate that there is no relationship between the electricity consumption and the economic growth in most of the MENA countries. Further evidence indicates that policies for energy conservation can have a little or no impact on economic growth in most of the MENA countries.     

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.     

Renewable energy consumption and economic growth in newly industrialized countries: Evidence from asymmetric causality test

In this study, the relationship between renewable energy consumption and economic growth in newly industrialized countries is examined for the period from 1971 to 2011. In previous studies, the causal relationship between variables was performed by the validity of the assumption of positive shocks. This study employs the asymmetric causality approach to investigate the relationship between positive and negative shocks of variables. The results reveal that negative shocks in renewable energy consumption causes positive shocks in real GDP for South Africa and Mexico; negative shocks in renewable energy consumption causes negative shocks in real GDP for India. In addition, the neutrality hypothesis is confirmed for Brazil and Malaysia.     

Causal relationship between nuclear energy consumption and economic growth: A multi-country analysis

This paper attempts to investigate the causal relationship between nuclear energy consumption and economic growth using the data from six countries among 20 countries that have used nuclear energy for more than 20 years until 2005. To this end, time-series techniques including the tests for unit roots, co-integration, and Granger-causality are employed to Argentina, France, Germany, Korea, Pakistan, and Switzerland. The main conclusion is that the causal relationship between nuclear energy consumption and economic growth is not uniform across countries. In the case of Switzerland, there exists bi-directional causality between nuclear energy consumption and economic growth. This means that an increase in nuclear energy consumption directly affects economic growth and that economic growth also stimulates further nuclear energy consumption. The uni-directional causality runs from economic growth to nuclear energy consumption without any feedback effects in France and Pakistan, and from nuclear energy to economic growth in Korea. However, any causality between nuclear energy consumption and economic growth in Argentina and Germany is not detected.     

Economic growth and energy consumption revisited — Evidence from linear and nonlinear Granger causality

The relationship between energy consumption and economic growth is considered as an imperative issue in energy economics. Previous studies have ignored the nonlinear behavior which could be caused by structural breaks. In this study, both linear and nonlinear Granger causality tests are applied to examine the causal relationship between energy consumption and economic growth for a sample of Asian newly industrialized countries as well as the U.S. This study finds evidence supporting a neutrality hypothesis for the United States, Thailand, and South Korea. However, empirical evidence on Philippines and Singapore reveals a unidirectional causality running from economic growth to energy consumption while energy consumption may have affected economic growth for Taiwan, Hong Kong, Malaysia and Indonesia. Policy implications are also discussed.     

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.     

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.     

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.     

Does more energy consumption bolster economic growth? An application of the nonlinear threshold regression model

This paper separates data extending from 1971 to 2002 into the energy crisis period (1971–1980) and the post-energy crisis period (1981–2000) for 82 countries. The cross-sectional data (yearly averages) in these two periods are used to investigate the nonlinear relationships between energy consumption growth and economic growth when threshold variables are used. If threshold variables are higher than certain optimal threshold levels, there is either no significant relationship or else a significant negative relationship between energy consumption and economic growth. However, when these threshold variables are lower than certain optimal levels, there is a significant positive relationship between the two. In 48 out of the 82 countries studied, none of the four threshold variables is found to be higher than the optimal levels. It is inferred that these 48 countries should adopt a more aggressive energy policy. As for the other 34 countries, at least one threshold variable is higher than the optimal threshold level and thus these countries should adopt energy policies with varying degrees of conservation based on the number of threshold variables that are higher than the optimal threshold levels.     

Multivariate granger causality between electricity consumption,exports and GDP: Evidence from a panel of Middle Eastern countries

This paper examines the causal relationship between electricity consumption, exports and gross domestic product (GDP) for a panel of Middle Eastern countries. We find that for the panel as a whole there are statistically significant feedback effects between these variables. A 1 per cent increase in electricity consumption increases GDP by 0.04 per cent, a 1 per cent increase in exports increases GDP by 0.17 per cent and a 1 per cent increase in GDP generates a 0.95 per cent increase in electricity consumption. The policy implications are that for the panel as a whole these countries should invest in electricity infrastructure and step up electricity conservation policies to avoid a reduction in electricity consumption adversely affecting economic growth. Further policy implications are that for the panel as a whole promoting exports, particularly non-oil exports, is a means to promote economic growth and that expansion of exports can be realized without having adverse effects on energy conservation policies.     

Biomass energy,technological progress and the environmental Kuznets curve: Evidence from selected European countries

We examine the causal relationship between economic growth and CO₂ emissions in a panel of 24 European countries from 1980 to 2010. Using an analytical framework that considers pooled mean group estimations in a dynamic heterogeneous panel setting, we show that there is an inverted U-shaped relationship between CO₂ emissions and economic growth in the long run and that there is no such relationship in the short run. In particular, we find that biomass energy is insignificantly linked to CO₂ emission. However, technological innovation significantly facilitates reduction of CO₂ emissions in the investigated countries. Altogether, our study implies that economic growth and environmental quality can be achieved simultaneously, which opens up new insights for policy-makers for sustainable economic development via implementation of renewable energy consumption through technological innovation.     

Energy consumption and economic growth: Evidence from the economic community of West African States (ECOWAS)

Access to modern energy is believed to be a prerequisite for sustainable development, poverty alleviation and the achievement of the Millennium Development Goals.However, theoretical models and empirical results offer conflicting evidence on the relationship between energy consumption and economic growth that we remain largely unsure of the cause-and-effect nature of this relationship, if indeed a relationship exists at all.This paper tests, in a panel context, the long-run relationship between energy access, and economic growth for fifteen African countries from 1980 to 2008 by using recently developed panel cointegration techniques.We adopt a three-stage approach, consisting of panel unit root, panel cointegration and Granger causality tests to study the dynamic causal relationships between energy consumption, energy prices and growth as well as relationship between electricity consumption, prices and growth.Results show that GDP and energy consumption as well as GDP and electricity move together in the long-run. By estimating these long-run relationships and testing for causality using panel-based error correction models, we found unidirectional long-run and short-run causality. The causality is running from GDP to energy consumption in the short-run, and from energy consumption to GDP in the long-run. There is also evidence of unidirectional causality running from electricity consumption to GDP in the long-run.This study thus provides empirical evidence of long-run and causal relationships between energy consumption and economic growth for our sample of fifteen countries; suggesting that lack or limited access to modern energy services could hamper economic growth and compromise the development prospects of these countries.     

Aggregate electricity demand in South Africa: Conditional forecasts to 2030

In 2008, South Africa experienced a severe electricity crisis. Domestic and industrial electricity users had to suffer from black outs all over the country. It is argued that partially the reason was the lack of research on energy, locally. However, Eskom argues that the lack of capacity can only be solved by building new power plants.The objective of this study is to specify the variables that explain the electricity demand in South Africa and to forecast electricity demand by creating a model using the Engle–Granger methodology for co-integration and Error Correction models. By producing reliable results, this study will make a significant contribution that will improve the status quo of energy research in South Africa.The findings indicate that there is a long run relationship between electricity consumption and price as well as economic growth/income. The last few years in South Africa, price elasticity was rarely taken into account because of the low and decreasing prices in the past. The short-run dynamics of the system are affected by population growth, tooAfter the energy crisis, Eskom, the national electricity supplier, is in search for substantial funding in order to build new power plants that will help with the envisaged lack of capacity that the company experienced. By using two scenarios for the future of growth, this study shows that the electricity demand will drop substantially due to the price policies agreed – until now – by Eskom and the National Energy Regulator South Africa (NERSA) that will affect the demand for some years.     

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.