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.     

China's energy consumption under the global economic crisis: Decomposition and sectoral analysis

It is now widely recognized that there is a strong relationship between energy consumption and economic growth. Most countries′ energy demands declined during the economic depression of 2008–2009 when a worldwide economic crisis occurred. As an export-oriented economy, China suffered a serious exports decline in the course of the crisis. However, it was found that energy consumption continued to increase. Against such a background, this paper aims to assess and explain the factors causing the growth of energy consumption in China. First, we will explain the impact of domestic final use and international trade on energy consumption by using decomposition analysis. Second, embodied energy and its variation across sectors are quantified to identify the key sectors contributing to the growth. Lastly, the policy implications for long-term energy conservation are discussed. The results show that the decline in exports was one of the driving forces for energy consumption reduction in the crisis, but that the growth of domestic demand in manufacturing and construction, largely stimulated by economic stimulus plans, had the opposite effect on energy consumption. International trade contributed to decreasing energy consumption of China during and after the crisis because the structure of exports and imports changed in this period.     

The causality relationship between energy consumption and GDP in G-11 countries revisited

This paper explores whether energy conservation policies can be implemented in countries with the same level of development. That is, is restraining energy consumption without compromising economic growth feasible in all industrialized countries? A new Granger non-causality testing procedure developed by Toda and Yamamoto [1995, Journal of Econometrics 66, 225–250] is applied to re-investigate the relationship, if any, between energy consumption and income in 11 major industrialized countries. The results clearly do not support the view that energy consumption and income are neutral with respect to each other, except in the case of the United Kingdom, Germany and Sweden where a neutral relationship is found. Bi-directional causality in the United States and uni-directional running from energy consumption to GDP in Canada, Belgium, the Netherlands and Switzerland are found. This indicates that energy conservation may hinder economic growth in the latter five countries. Further, the causality relationship appears to be uni-directional but reversed for France, Italy and Japan which implies that, in these three countries, energy conservation may be viable without being detrimental to economic growth.     

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.     

A low energy option for the UK

A comparatively new approach to energy demand forecasting based upon physical models rather than traditional economic extrapolations is presented for the UK until the year 2025. Initially disaggregations of current end-use energy requirements within all sectors of the national economy are formulated, followed by a demonstration of how the energy demand can be influenced by the widespread adoption of feasible energy conserving technologies. Matching demand with the appropriate supply option and projecting for a fairly high growth future indicates that increased economic output and lifestyle improvements are attainable without accompanying vast increases in energy consumption. The implications for a national energy policy with conservation as a central theme are clearly shown.     

The electricity consumption and GDP nexus for the Fiji Islands

Fiji is a small open island economy dependent on energy for its growth and development; hence, the relationship between energy consumption and economic growth is crucial for Fiji's development. In this paper, we investigate the nexus between electricity consumption and economic growth for Fiji within a multivariate framework through including the labour force variable. We use the bounds testing approach to cointegration and find that electricity consumption, GDP and labour force are only cointegrated when GDP is the endogenous variable. We use the Granger causality F-test and find that in the long-run causality runs from electricity consumption and labour force to GDP, implying that Fiji is an energy dependent country and thus energy conservation policies will have an adverse effect on Fiji's economic growth.     

Growth and structural change in China's energy economy

China has been the world's most vibrant economy and its largest source of energy demand growth over the past two decades, accounting for more than one-quarter of net growth in global primary energy consumption from 1980 to 2005. To sustain economic growth and rising living standards, China needs effective policies that anticipate and shape the country's future energy requirements. In this paper, we examine China's national economic and energy accounts over the past decade for insights into changing energy use patterns and their relationship to economic structure. Our results indicate that incipient structural changes in the Chinese energy economy and sustained economic and energy demand growth in China will pose important, and different, challenges for policymakers.     

The role of globalization on the recent evolution of energy demand in India: Implications for sustainable development

Using annual data for the period 1971–2012, this study explores the relationship between globalization and energy consumption for India by endogenizing economic growth, financial development and urbanization. The cointegration test proposed by Bayer–Hanck (2013) is applied to estimate the long-run and short-run relationships among the variables. After confirming the existence of cointegration, the overall results from the estimation of an ARDL energy demand function reveal that in the long run, the acceleration of globalization (measured in three dimensions — economic, social and overall globalization) leads to a decline in energy demand in India. Furthermore, while financial development is negatively related to energy consumption, economic growth and urbanization are the key factors leading to increased energy demand in the long run. These results have policy implications for the sustainable development of India. In particular, globalization and financial development provide a win–win situation for India to increase its economic growth in the long run and become more environmentally sustainable.     

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.     

Electricity consumption and metropolitan economic performance in Guangzhou: 1950–2013

This study analyzes the relationship between electricity consumption and metropolitan economic growth for Guangzhou, China using 64 years of annual-frequency data. The capital stock is used as a control variable because of its role in mediating the relationship between energy utilization and economic output. Empirical results indicate unidirectional Granger causality from electricity consumption to metropolitan economic performance in the short run. This is consistent with the argument that dependable electricity infrastructure and service can play a vital role in facilitating economic growth. Implications for conservation efforts and regional development are discussed.     

Energy consumption and economic growth in New Zealand: Results of trivariate and multivariate models

This study examines the energy consumption–growth nexus in New Zealand. Causal linkages between energy and macroeconomic variables are investigated using trivariate demand-side and multivariate production models. Long run and short run relationships are estimated for the period 1960–2004. The estimated results of demand model reveal a long run relationship between energy consumption, real GDP and energy prices. The short run results indicate that real GDP Granger-causes energy consumption without feedback, consistent with the proposition that energy demand is a derived demand. Energy prices are found to be significant for energy consumption outcomes. Production model results indicate a long run relationship between real GDP, energy consumption and employment. The Granger-causality is found from real GDP to energy consumption, providing additional evidence to support the neoclassical proposition that energy consumption in New Zealand is fundamentally driven by economic activities. Inclusion of capital in the multivariate production model shows short run causality from capital to energy consumption. Also, changes in real GDP and employment have significant predictive power for changes in real capital.     

基于周期理论的2010年中国能源需求预测

本文运用周期理论对我国能源消费量变化进行分析,发现能源消费量与经济增长具有明显的周期性变化,两者之间存在长期协整关系;通过采用分解理论和滤波方法得到了能源消费量的周期性规律,结果验证了能源消费与经济增长的周期性关系。在此基础上,建立ARIMA乘积季节模型对2010年我国的能源消费总量和分品种消费量进行了预测,并简要分析了我国2010年能源需求可能面临的不确定性。     

The causal relationship between energy use and economic growth in Switzerland

This paper investigates the relationships between energy consumption and economic growth in Switzerland over the period 1950–2010. We apply bounds testing techniques to different energy types separately. Robustness tests are performed by including additional variables and restricting the analysis to the period after 1970. The results show that there exist robust long-run relationships going from real GDP toward heating oil and electricity consumption. The relationship between heating oil and GDP is in fact bidirectional, although weaker from heating oil toward GDP than in the reverse direction. When investigating the period 1970–2010 only, the estimate of the long-run income elasticity of electricity consumption loses statistical significance and that for heating oil becomes negative. Those results imply a possible decoupling between GDP growth and energy consumption, so that energy conservation policies are not necessarily expected to have a negative impact on Swiss economic growth.     

有关我国节能的几个战略指导思想

节能对我国的可持续发展具有重要意义。本文基于中国能源发展的具体国情,提出中国特有的5个节能战略指导思想:应始终从全生命周期角度看节能问题,使动态发展过程中整体系统能源成本最低;从系统层次、供需协调的角度构建可持续能源系统,把合适的能源放在合适的地方;应充分利用终端节能的"放大效应",从用能侧减少需求;严格执行能源生产和消费总量控制,遏制能耗过快增长;强调社会、人文因素和充分发挥政府职能。     

The relationship between GDP and electricity consumption in 10 Asian countries

The purpose of this study is to estimate the relationships between GDP and electricity consumption in 10 newly industrializing and developing Asian countries using both single data sets and panel data procedures. The empirical results from single data set indicate that the causality directions in the 10 Asian countries are mixed while there is a uni-directional short-run causality running from economic growth to electricity consumption and a bi-directional long-run causality between electricity consumption and economic growth if the panel data procedure is implemented. These empirical findings imply that electricity conservation policies through both rationalizing the electricity supply efficiency improvement to avoid the wastage of electricity and managing demand side to reduce the electricity consumption without affecting the end-user benefits could be initiated without adverse effect on economic growth. The findings on the long-run relationship indicate that a sufficiently large supply of electricity can ensure that a higher level of economic growth.     

Human capital and export diversification as new determinants of energy demand in the United States

This paper investigates how education and export diversification contribute to energy demand by also incorporating the role of natural resource, oil prices and income in driving energy demand function for the United States (U.S.) economy. In doing so, we apply the unit root test of Kim and Perron (2009) and the bootstrapping autoregressive-distributed lag (ARDL) cointegration approach developed by McNown et al. (2018), which accommodates the presence of a single unknown structural break in the series. The empirical results confirm that the variables are cointegrated in a long-run relationship. Education is negatively linked to energy demand, and export diversification also decreases this demand in the long-run. On the other hand, economic growth increases energy consumption, while oil prices reduce energy demand in the long-run. Natural resource production affects energy consumption positively. Further, the Vector Error Correction Mechanism (VECM)'s Granger causality analysis reveals a feedback effect between education and energy demand. Export diversification causes energy demand, and in return, energy demand causes export diversification. A bidirectional causality also exists between economic growth and energy demand. The paper also discusses the potential implications of the results.     

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.     

Microeconomics and the demand for space heating

The techniques of economic utility theory are combined with the technical equations for heat loss from a dwelling to give insight into the variation of consumer demand for space heating. A theoretical relationship is established between the performance of the occupied dwelling as the external temperature falls and the short-run income elasticity of energy demand. The analysis is applied to studies of U.K. heating practice in the 1950s and the implied indifference map for thermal comfort deduced. This indifference map is found to show a considerable economic propensity to absorb some of the potential savings from energy conservation measurements in higher internal temperatures. The effect found is sufficiently large to have consequences for future energy planning if it were still present in the U.K. domestic sector. The analysis highlights a number of points which should aid the interpretation of field experiments on domestic energy consumption. In particular, it is shown that unless great care is taken to separate out the technical and economic origins of internal temperature variation, the results of field studies on the effectiveness of conservation techniques may only be of shortlived value.     

Short- and long-run effects between oil consumption and economic growth in China

This paper examines both the equilibrium relationship and the predictability between oil consumption and economic growth in China. Time series variables are employed in empirical tests. Cointegration tests suggest that these two variables tend to move together in the long run. In addition, Granger causality tests indicate that oil consumption could be a useful factor that forecasts changes in the economy in the short run as well as in the long run. The oil consumption is found to have great effects on the economy. This is because the enormous use of oil in sectors like the industry may have directly pushed the economy. However, this finding would probably stimulate faster growth in oil consumption and so should be concerned with care. Conversely, economic growth could be used as a predictive factor forecasting oil consumption only in the long run. Economic growth appears to have small effects on oil use; this could be attributed largely to China's energy consumption structure. Coal constitutes most of the energy consumption and thus the considerable demand for energy resulting from rapid economic growth could be mostly explained by the mass use of coal.     

Causality between energy consumption and output growth in the Indian cement industry: An application of the panel vector error correction model (VECM)

The aim of this paper is to examine the existence and direction of the causal relationship between energy consumption and output growth in the Indian cement industry for the period 1979–80 to 2004–05. The most recently developed panel unit root, a heterogeneous panel cointegration and panel-based error correction model, is applied within a multivariate framework. The empirical results confirm a positive, long-run cointegrated relationship between output and energy consumption when heterogeneous state effects are taken into account. We also found a long-run, bi-directional relationship between energy consumption and output growth in the Indian cement industry for the study period, implying that an increase in energy consumption directly affects the growth of this sector and that growth stimulates further energy consumption. These empirical findings imply that energy consumption and output are jointly determined and affect each other. The empirical evidence also suggests the implementation of energy conservation policies oriented toward improving energy-use efficiency to avoid any negative impacts of the conservation policies on the growth of this industry.