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.     

The impact of energy prices on energy consumption and energy efficiency: evidence from Taiwan

This study aims to explore the impact of energy prices on energy consumption and energy efficiency using industry data for Taiwan over the period of 1982–2011. A frontier-based framework is proposed with a microeconomic foundation to measure energy efficiency and decompose energy consumption into energy utilization and energy wastage in the short and the long run. We learn that the traditional energy efficiency indicators are essentially ambiguous measures. In contrast, the frontier-based framework can focus the measure on energy relatively specifically and capture the essence of a proper efficiency measure more precisely. The empirical analyses reveal that the values of short- and long-run energy efficiency in the Taiwan manufacturing sector are on average 0.6016 and 0.8040, respectively. Moreover, energy utilization is price inelastic in the short run, but in the long run, it is elastic at ?0.79. The energy price elasticity of energy wastage in the short run is ?0.61, which is somewhat higher than the ?0.52 in the long run. The energy price elasticity of energy efficiency in the short run is 0.077 and that in the long run is 0.144. All the energy price elasticities obtained using the frontier-based framework are lower than those obtained using the common framework of the past without distinguishing the heteroscedasticity between the energy utilization and energy wastage.     

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.     

Industrial electricity demand and energy efficiency policy: the case of the Swedish mining industry

The purpose of this paper is to analyze long-run electricity demand behavior in the Swedish mining industry with special emphasis on the impact of energy prices and private research and development (R & D) on electricity use. Methodologically, we estimate a generalized Leontief variable cost function using a panel data set of nine mining operations over the time period 1990–2005. Since the lower boundary of a set of short-run cost functions confines the long-run cost function, we can compute the long-run own- and cross-price elasticities of electricity demand. The empirical results indicate that long-run electricity demand in the mining industry is sensitive to changes in the own price, and already in a baseline setting Swedish mining companies tend to allocate significant efforts towards improving energy efficiency, in part through private R & D. From a policy perspective, the results imply that taxes (and tax exemptions) on electricity can have significant long-run impacts on electricity use. Moreover, future evaluations of so-called voluntary energy efficiency programs must increasingly recognize the already existing incentives to reduce energy use in energy-intensive industries.     

Economy-wide estimates of energy rebound effect: Evidence from China's provinces

The ongoing debate on the magnitude of China's economy-wide energy rebound effect (RE) entails further investigations not only with more details, but also with more credible methods. In this study, a modified two-stage approach, which could avoid methodological issues regarding RE estimation, is applied to estimate macroeconomic RE with a data panel of 30 provinces in China during the period 1997–2015. In particular, in order to comprehensively measure energy efficiency, we construct a dynamic energy efficiency indicator which considers not only the static efficiency of energy use but also the technical change regarding energy usage. Using dynamic panel data models, we estimate the elasticity of energy consumption with respect to energy efficiency which directly links to the measurement of RE. The short-run and long-run estimates of RE are reported, and the 95% confidence interval was computed for each sample based on the nonparametric bootstrap method to further analyze the macroeconomic RE of different regions. Results indicate that the average RE of all provinces is 88.55% in the short run, and the average long-run RE is 77.50%; the RE in the developed eastern region continuously decreased, while RE in the western region increased to be the largest during the research period.     

Energy use,exports, imports and GDP: New evidence from the OECD countries

This paper aims to investigate the relationship between energy use-GDP, energy use-exports-trade and energy use-imports on aggregate level in the OECD countries. While the energy use-growth nexus is widely examined in the literature, studies on the energy use-trade nexus are very scarce. Thus, this study also serves to fill this gap by presenting a new research on the OECD countries. We employ the panel cointegration technique and use the Granger representation theorem to examine the presence of long-run relationship and the causality between pairs of variables. To investigate the presence of causality, several tests developed by Canning and Pedroni (2008) are used. We find that the pairs of energy use-GDP, energy use-exports and energy use-imports are cointegrated and there is two-way Granger causality between each pairs. We also estimate the long-run elasticities by employing panel dynamic ordinary least squares. The results suggest that the sign of long-run elasticity is positive for all pairs. Particularly, 1% increase in GDP, export and import causes almost 0.32%, 0.21% and 0.16% increase in energy use respectively.     

Industry location in Chinese provinces: Does energy abundance matter?

We identify the driving factors of manufacturing activity across Chinese provinces with a particular focus on energy endowments. A model of production location is estimated, including both comparative advantage and economic geography determinants. The data set used consists of a panel of 28 Chinese provinces and 12 manufacturing industries over the period 1999–2009. Results confirm the relative importance of energy endowments. We find that larger energy endowments are significantly correlated with larger production of energy-intensive sectors. Disaggregation across energy carriers shows that coal exhibits the strongest impact. These results are robust across alternatives.     

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.     

Purchased energy and policy impacts in the US manufacturing sector

The US manufacturing sector, which consists of industries that produce durable and nondurable goods, accounts for about 30 % of all the final energy consumed in the country. In this study, manufacturing sector data coming primarily from the Annual Survey of Manufacturers are used to estimate the total impact of one mode of energy efficiency policy, market persuasion programs, on aggregate electricity consumption and energy expenditures. Using a panel model consisting of data for 184 industries, the findings indicate that the cumulative effects since 2002 of this policy mode is a reduction in 2010 electricity consumption of 5.4 %, of electricity expenditures of 2.4 %, and of all other fuel expenditures of 5.7 %. These estimates are derived after controlling for changes in output, other production inputs, and economic conditions. Particular attention in this study is given to the effects of a permanent shift in demand, and temporary business cycle shock, on model external validity.     

Carbon dioxide emissions and economic growth: Panel data evidence from developing countries

In this paper we test the Environment Kuznet's Curve (EKC) hypothesis for 43 developing countries. We suggest examining the EKC hypothesis based on the short- and long-run income elasticities; that is, if the long-run income elasticity is smaller than the short-run income elasticity then it is evident that a country has reduced carbon dioxide emissions as its income has increased. Our empirical analysis based on individual countries suggests that Jordan, Iraq, Kuwait, Yemen, Qatar, the UAE, Argentina, Mexico, Venezuela, Algeria, Kenya, Nigeria, Congo, Ghana, and South Africa—approximately 35 per cent of the sample—carbon dioxide emissions have fallen over the long run; that is, as these economies have grown emissions have fallen since the long-run income elasticity is smaller than the short-run elasticity. We also examine the EKC hypothesis for panels of countries constructed on the basis of regional location using the panel cointegration and the panel long-run estimation techniques. We find that only for the Middle Eastern and South Asian panels, the income elasticity in the long run is smaller than the short run, implying that carbon dioxide emission has fallen with a rise in income.     

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.     

Primary energy demand in Japan: an empirical analysis of long-term trends and future CO2 emissions

This paper examines the long-run relationship between energy demand, GNP and the real energy price in Japan using data covering 1887–2001. It is found that, if an Underlying Energy Demand Trend is appropriately incorporated, the resulting econometric model produces a long-run income elasticity of about unity and a long-run price elasticity of about–0.2. The estimated model is utilised to forecast energy consumption and CO₂ emissions up to 2012. It is shown that given current economic conditions and policies there is considerable uncertainty about whether Japan will be able to meet its Kyoto target by reducing CO₂ emissions in 2008–2012 to the 1990 level. It is shown that this uncertainty depends on the strength of the economy and leaves the Japanese government with a difficult policy dilemma. If there is a resurgence in growth to something near the annual average growth rate since the early 1980s a considerable effort will be required in order to meet its Kyoto target; requiring not only using the Kyoto Mechanisms, but also additional tougher domestic policies and measures such as emissions capping, R&D incentives, and education for energy conservation in addition to a pricing and tax policy.     

Long-run elasticity of US energy demand: A process analysis approach

In 1970 the authors undertook a study for the Shell Oil Company of the long-run elasticity of US energy demand. The methodology of the study is described and the results are summarized. It is argued that the process analysis approach, which makes use of subjective judgement, has certain advantages over more formal econometric approaches and is of relevance to current work in energy demand forecasting.     

CO2 emissions,energy consumption and economic growth in Turkey

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

Input substitution in Thailand's manufacturing sector: Implications for energy policy

Input demand and substitution elasticities for five manufacturing sector industries in Thailand are estimated using a three-factor (capital, labour and energy) translog cost function covering the first oil-shock period 1974–1977. In all cases the demand is elastic for energy, close to unity for labour, and inelastic for capital. Capital and energy are always substitutes as are capital and labour. The labour-intensive and comparative- advantage-based industries showed greater responsiveness to energy price changes relative to the capital-intensive and protected industries in the sense that the former two can substitute capital and labour for energy whereas the latter two can substitute only capital.     

CO2 emissions,energy consumption and economic growth in China: A panel data analysis

This paper examines the causal relationships between carbon dioxide emissions, energy consumption and real economic output using panel cointegration and panel vector error correction modeling techniques based on the panel data for 28 provinces in China over the period 1995–2007. Our empirical results show that CO₂ emissions, energy consumption and economic growth have appeared to be cointegrated. Moreover, there exists bidirectional causality between CO₂ emissions and energy consumption, and also between energy consumption and economic growth. It has also been found that energy consumption and economic growth are the long-run causes for CO₂ emissions and CO₂ emissions and economic growth are the long-run causes for energy consumption. The results indicate that China's CO₂ emissions will not decrease in a long period of time and reducing CO₂ emissions may handicap China's economic growth to some degree. Some policy implications of the empirical results have finally been proposed.     

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.     

The energy demand in the British and German industrial sectors: Heterogeneity and common factors

This paper estimates energy demands for the German and British industrial sectors over the 1978–2004 and the 1991–2004 samples. From time series models we can conclude that there is a considerable variation in the value of the coefficients across sectors, even though energy demands with sensible parameters can rarely be estimated. When using a panel approach, the ability of some estimators to allow for diversity across subsectors was an important factor in explaining the estimates for price elasticity. On the other hand, correlation across panel members or common factors did not markedly influence our results. With regard to the estimated parameters, our preferred choice for elasticity of economic activity and price in the longer sample is 0.52 and ? 0.64. Similar values are found in the case of the shorter samples. Bearing in mind the high price elasticity, energy taxes can be considered an effective strategy for reducing energy consumption.     

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.     

Impact of energy on employment in manufacturing

This paper endeavours to study the changes in the distribution of aggregate employment variation among manufacturing industries. Within the structure developed, estimates of the effects of energy on the distribution of employment and on the distribution of changes in employment between various manufacturing industries are made. The evidence indicates that changes in energy have had a significant impact on employment patterns. Energy has had the effect of decreasing the share of projected employment and increasing vulnerability to cyclical changes in employment in industries with a high relative dependence on energy.