An asymmetric analysis of the impacts of energy use on carbon dioxide emissions in the G7 countries.

Abstract

The foremost theme of the paper is to explore the asymmetric/symmetric impact of energy consumption on the carbon dioxide emission of G7 countries (Germany, Canada, USA, Italy, France, Italy, UK, and Japan). The nonlinear autoregressive distributed lag is used to measure asymmetric/symmetric cointegration by using annual data of G7 countries from 1965 to 2019. The augmented Dickey-Fuller and structural break unit root test is employed to measure the stationarity in variables while the Brock, Dechert, and Scheinkman test is used for measuring nonlinearity and the Wald test is used to figure out short- and long-run asymmetries/symmetries, respectively. The estimated findings of the nonlinear autoregressive distribution lag model show a significant effect of energy use on the ecological footprint. The asymmetric causality test provides evidence of unidirectional, bidirectional, and asymmetrical/symmetrical causality among the variables of G7 nations. The finding of the study suggested policy for the government of Canada and France to use coal instead of oil and gas while the USA, Germany, Italy, UK, and Japan are required to consume gas as compared to oil and coal. Similarly, the study also suggests using modern technology, renewable energy, and preventive measurement for ensuring environmental betterment.