The renewable energy consumption–growth nexus in Central America

This study examines the relationship between renewable energy consumption and economic growth for a panel of six Central American countries over the period 1980–2006. The heterogeneous panel cointegration test reveals a long-run equilibrium relationship between real GDP, renewable energy consumption, real gross fixed capital formation, and the labor force with the respective coefficients positive and statistically significant. The results from the panel error correction model indicate bidirectional causality between renewable energy consumption and economic growth in both the short- and long-run.     

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 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.     

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.     

The dynamic links between energy consumption,economic growth,financial development and trade in China: Fresh evidence from multivariate framework analysis

This study investigates the relationship between energy use and economic growth by incorporating financial development, international trade and capital as important factors of production function in case of China over the period of 1971–2011. The ARDL bounds testing approach to cointegration was applied to examine long run relationship among the series while stationarity properties of the variables was tested by applying structural break test.Our empirical evidence confirmed long run relationship among the variables. The results showed that energy use, financial development, capital, exports, imports and international trade have positive impact on economic growth. The Granger causality analysis revealed that unidirectional causal relationship running from energy use to economic growth. Financial development and energy use Granger cause each other. There is bidirectional causality between international trade and energy use. The feedback relation exists between financial development and international trade. There is also bidirectional causality exists between capital and energy demand, financial development and economic growth and, international trade and economic growth. This paper makes significant contribution in energy economics and opens up new direction for policy makers to explore new and alternative sources of energy which would be helpful in meeting the rising demand of energy due to sustained rate of economic growth.     

A dynamic panel study of economic development and the electricity consumption-growth nexus

This study examines the relationship between electricity consumption and economic growth for 88 countries categorized into four panels based on the World Bank income classification (high, upper middle, lower middle, and low income) within a multivariate panel framework over the period 1990–2006. The Larsson et al. (2001) panel cointegration test indicates there is a long-run equilibrium relationship between real GDP, coal consumption, real gross fixed capital formation, and the labor force for the high, upper middle, and lower middle income country panels. The results from the panel vector error correction models reveal (1) bidirectional causality between electricity consumption and economic growth in both the short- and long-run for the high income and upper-middle income country panels; (2) unidirectional causality from electricity consumption to economic growth in the short-run, but bidirectional causality in the long-run for the lower-middle income country panel; and (3) unidirectional causality from electricity consumption to economic growth for the low income country panel.     

Bounds test approach to cointegration and causality between nuclear energy consumption and economic growth in India

This paper attempts to examine the dynamic relationship between economic growth, nuclear energy consumption, labor and capital for India for the period 1969–2006. Applying the bounds test approach to cointegration developed by Pesaran et al. (2001) we find that there was a short- and a long-run relationship between nuclear energy consumption and economic growth. Using four long-run estimators we also found that nuclear energy consumption has a positive and a statistically significant impact on India's economic growth. Further, applying the Toda and Yamamoto (1995) approach to Granger causality and the variance decomposition approach developed by Pesaran and Shin (1998), we found a positive and a significant uni-directional causality running from nuclear energy consumption to economic growth without feedback. This implies that economic growth in India is dependent on nuclear energy consumption where a decrease in nuclear energy consumption may lead to a decrease in real income. For a fast growing energy-dependent economy this may have far-reaching implications for economic growth. India's economic growth can be frustrated if energy conservation measures are undertaken without due regard to the negative impact they have on economic growth.     

Energy consumption and economic growth nexus in Tanzania: An ARDL bounds testing approach

In this paper, we examine the intertemporal causal relationship between energy consumption and economic growth in Tanzania during the period of 1971–2006. Unlike the majority of the previous studies, we employ the newly developed autoregressive distributed lag (ARDL)-bounds testing approach by Pesaran et al. [2001. Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics 16, 289–326] to examine this linkage. We also use two proxies of energy consumption, namely total energy consumption per capita and electricity consumption per capita. The results of the bounds test show that there is a stable long-run relationship between each of the proxies of energy consumption and economic growth. The results of the causality test, on the other hand, show that there is a unidirectional causal flow from total energy consumption to economic growth and a prima-facie causal flow from electricity consumption to economic growth. Overall, the study finds that energy consumption spurs economic growth in Tanzania.     

Energy consumption and GDP in Turkey: Is there a co-integration relationship?

Energy consumption and GDP are expected to grow by 5.9% and 7% annually until 2025 in Turkey. This paper tries to unfold the linkage between energy consumption and GDP by undertaking a co-integration analysis for Turkey with annual data over the period 1970–2003. The analysis shows that energy consumption and GDP are co-integrated. This means that there is a (possibly bi-directional) causality relationship between the two. We establish that there is a unidirectional causality running from GDP to energy consumption indicating that energy saving would not harm economic growth in Turkey. In addition, we find that energy consumption keeps on growing as long as the economy grows in Turkey.     

The causal dynamics between coal consumption and growth: Evidence from emerging market economies

This study examines the relationship between coal consumption and economic growth for 15 emerging market economies within a multivariate panel framework over the period 1980–2006. The heterogeneous panel cointegration results indicate there is a long-run equilibrium relationship between real GDP, coal consumption, real gross fixed capital formation, and the labor force. While in the long-run both real gross fixed capital formation and the labor force have a significant positive impact on real GDP, coal consumption has a significant negative impact. The panel causality tests show bidirectional causality between coal consumption and economic growth in both the short- and long-run.     

Oil prices,nuclear energy consumption,and economic growth: New evidence using a heterogeneous panel analysis

This paper applies panel data analysis to examine the short-run dynamics and long-run equilibrium relationships among nuclear energy consumption, oil prices, oil consumption, and economic growth for developed countries covering the period 1971–2006. The panel cointegration results show that in the long run, oil prices have a positive impact on nuclear energy consumption, suggesting the existence of the substitution relationship between nuclear energy and oil. The long-run elasticity of nuclear energy with respect to real income is approximately 0.89, and real income has a greater impact on nuclear energy than do oil prices in the long run. Furthermore, the panel causality results find evidence of unidirectional causality running from oil prices and economic growth to nuclear energy consumption in the long run, while there is no causality between nuclear energy consumption and economic growth in the short run.     

Examining carbon emissions economic growth nexus for India: A multivariate cointegration approach

The study probes cointegration and causality between carbon emissions and economic growth for India using ARDL bounds testing approach complemented by Johansen–Juselius maximum likelihood procedure in a multivariate framework by incorporating energy supply, investment and employment for time span 1971–2006. The study fails to establish long-run equilibrium relationship and long term causality between carbon emissions and economic growth; however, there exists a bi-directional short-run causality between the two. Hence, in the short-run, any effort to reduce carbon emissions could lead to a fall in the national income. This study also establishes unidirectional short-run causality running from economic growth to energy supply and energy supply to carbon emissions. The absence of causality running from energy supply to economic growth implies that in India, energy conservation and energy efficiency measures can be implemented to minimize the wastage of energy across value chain. Such measures would narrow energy demand–supply gap. Absence of long-run causality between carbon emissions and economic growth implies that in the long-run, focus should be given on harnessing energy from clean sources to curb carbon emissions, which would not affect the country’s economic growth.     

Electricity consumption and economic growth in Algeria: A multivariate causality analysis in the presence of structural change

This article addresses the issue of electricity consumption, petroleum price and economic growth in Algeria. The primary objective is to investigate and analyze the causal relationship between electricity consumption (EC), Brent oil price (BOP) and economic growth (GDP) for Algeria over the period of 1971–2010. To examine short-run, long-run and joint causality relationships we used a multivariate cointegration approach based on the recent advances in time series econometrics (e.g., Zivot–Andrews test; Gregory–Hansen cointegration test; Vector Error Correction Models (VECM)). The empirical results show that there is evidence of short-run and a strong long-run bi-directional causal relationship between EC and real GDP in Algeria. Findings indicate also the absence of causal relationship between BOP and EC. Our empirical findings support the idea that there a link between electricity consumption and economic growth and disproves the neo-classical assumption referred to as the “neutrality hypothesis”.     

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.     

Modeling the CO2 emissions, energy use, and economic growth in Russia

This paper applies the co-integration technique and causality test to examine the dynamic relationships between pollutant emissions, energy use, and real output during the period between 1990 and 2007 for Russia. The empirical results show that in the long-run equilibrium, emissions appear to be energy use elastic and output inelastic. This elasticity suggests high energy use responsiveness to changes in emissions. The output exhibits a negative significant impact on emissions and does not support EKC hypothesis. These indicate that both economic growth and energy conservation policies can reduce emissions and no negative impact on economic development. The causality results indicate that there is a bidirectional strong Granger-causality running between output, energy use and emissions, and whenever a shock occurs in the system, each variable makes a short-run adjustment to restore the long-run equilibrium. The average speed of adjustment is as low as just over 0.26 years. Hence, in order to reduce emissions, the best environmental policy is to increase infrastructure investment to improve energy efficiency, and to step up energy conservation policies to reduce any unnecessary waste of energy. That is, energy conservation is expected to improve energy efficiency, thereby promoting economic growth.     

Causal relationship between trade openness,economic growth and energy consumption: A panel data analysis of Asian countries

This paper explores the causal relationship between economic growth, trade openness and energy consumption using data of 15 Asian countries. The study covers the period of 1980–2011. We have applied panel cointegration and causality approaches to examine the long-run and causal relationship between variables.Empirical results confirm the presence of cointegration between variables. The impact of economic growth and trade openness on energy consumption is found to be positive. The panel Granger causality analysis reveals the bidirectional causality between economic growth and energy consumption, trade openness and energy consumption.     

Renewable energy,trade, and economic growth in the Asia-Pacific region

This paper employs panel multivariate technology to probe the impact of renewable energy and trade (imports and exports) on the output and to study the Granger causality between the mentioned variables with a sample of 15 Asia-Pacific countries for the period of 1994–2014. Short-run causality tests show bidirectional causal relationship between the output and exports and no Granger causal relationship from imports to renewable energy or the output. Moreover, long-run causality tests show bidirectional causality between the output and renewable energy, and unidirectional causality from international trade (imports and exports) to the output and renewable energy. The long-run elasticities indicate that the renewable energy consumption and trade play positive roles in economic growth. This study’s energy policy recommendation is that policy authorities should encourage the development of trade (imports and exports), which not only drives economic growth and prosperity but also accelerates the pace of renewable energy consumption.     

Renewable energy consumption and economic growth: Evidence from a panel of OECD countries

This study examines the relationship between renewable energy consumption and economic growth for a panel of twenty OECD countries over the period 1985–2005 within a multivariate framework. Given the relatively short span of the time series data, a panel cointegration and error correction model is employed to infer the causal relationship. The heterogeneous panel cointegration test reveals a long-run equilibrium relationship between real GDP, renewable energy consumption, real gross fixed capital formation, and the labor force with the respective coefficients positive and statistically significant. The Granger-causality results indicate bidirectional causality between renewable energy consumption and economic growth in both the short- and long-run.     

Energy consumption and economic growth revisited: Does the size of unrecorded economy matter?

We analyze the long-run relationship between energy consumption and real gross domestic product (GDP) in Turkey taking into account the size of unrecorded economy. Since in developing countries, mainly due to the unrecorded economic activities, the official GDP is not measured correctly, the investigation of the linkage between energy consumption and official GDP may not give reliable results. In this study, empirical results for the case of Turkey over the period 1970–2005 suggest that there is a long-run equilibrium relationship between the officially calculated GDP and energy consumption. Besides, using the error-correction modeling technique, we find out that unidirectional causality runs from official GDP to energy in both short and long runs. However, when we take into account unrecorded economy, we detect neither cointegration nor causality between energy consumption and true GDP. These empirical findings imply that: first, energy conservation policies can be implemented in order to reduce greenhouse gas emissions without any adverse effect on the recorded economic activities; second the production function in the unrecorded economy is not stable. Furthermore, economic policies to combat unrecorded economy may not serve as a complement to energy conservation policies.     

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.