An econometric study of energy consumption, carbon emissions and economic growth in South Asia: 1972-2009

Previously economic growth was generally discussed in terms of foreign direct investment (FDI), educational growth, savings, investments, inflation as well as trade openness of a nation. Very recently it has been identified that population is one of the major determinants of economic growth of a nation. In the recent years, the study of urbanization has gained a matter of concern in developing countries as it has been recognized as part of a larger process of economic development which is affecting developing countries. South Asian countries are one of the emerging economics and growing at a faster rate over the past few years. At the same time, population of South Asia is growing at a significant rate. Therefore the study has attempted to identify the causal relationship between urban population and economic growth in South Asia using a panel data analysis. The study makes use of the Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP), Pesaran as well as Fisher methods for panel unit root test. The panel Pedroni cointegration test suggests that there is long run relationship between the variables. The further panel Vector Error Correction Model (VECM) suggests that there is long run causality running from urban population growth to economic growth in South Asia. The study concludes that the growth of urban population can have significant impact on economic growth in South Asia in the long run.

Foreign investment and finance are considered key to economic growth for many economies. In terrorism, these economies directly lose international capital. As a result, it causes an adverse impact on economic development in the countries. Human capital and natural capital factors will be fruitful when the environment is conducive and peaceful. Similarly, energy consumption and FDI would stimulate economic growth, subject to the absence of law-and order issues. This manuscript investigated the impact of terrorism, energy consumption and FDI on economic growth in South Asia over the period from 2002 to 2020. The model’s results display that terrorism and FDI have a negative impact on economic growth in South Asia. The result of energy consumption exhibits a positive and significant influence on economic growth in South Asia. Further, the results indicate that domestic investment and education in South Asia positively impact economic growth. Consequently, it is suggested that the South Asia countries should take appropriate actions to eradicate the problem of terrorism, ensure the availability of energy, and improve the labour force’s skills to achieve desirable economic growth.

Purpose The purpose of this paper is to empirically examine the long run and causal relationship between energy consumption, carbon emissions and economic growth in India over the period 1971-2009 within multivariate framework. Design/methodology/approach The study uses the Johansen cointegration test to examine the possible long-run equilibrium relationship followed by Granger causality test based on vector error correction model to explore short- and long-run causality between energy consumption, carbon emissions and economic growth in India. Findings Cointegration result indicates the long-run equilibrium relationship between economic growth, energy consumption and carbon emissions. Further causality results suggest unidirectional causality running from energy consumption and carbon emissions to economic growth in long run, energy consumption to carbon emissions, carbon emissions to economic growth and economic growth to energy consumption in short run. Practical implications There is urgent need of policy development toward boosting energy efficiency, developing alternative carbon-free energy sources like nuclear, renewables and expansion of affordable energy for faster, sustainable and more inclusive growth for India in upcoming years. Originality/value India, an energy-dependent economy needs to effectively implement energy efficiency measures, super critical technologies in power plants, and investment in renewable energy resources in order to minimize the dependence on fossil fuels and carbon emissions for faster, more inclusive and sustainable growth.

This study examines the impact of renewable energy investments on economic growth in South Asia, a region grappling with rapid economic expansion and environmental degradation due to heavy reliance on fossil fuels. This paper employs panel data from 1998 to 2022 and 15 emerging countries to examine the nexus between RE consumption, economic growth, CO2 emissions, and energy access using GMM and fixed-effects models. These findings suggest that increasing 1% of renewable energy consumption will increase GDP by 0.072%, while increasing 1% of CO2 emissions will reduce GDP by 0.3%. Besides, renewable energy investments are expected to contribute to the generation of 2.98 million green job opportunities by 2035. The study shows that renewable energy can decrease emissions, increase energy security, and create jobs. Nevertheless, there are limitations like capital-intensive requirements and a lack of proper infrastructure and policies that have to be overcome. Therefore, the study supports the proposition that the sustainable development of renewable energy in South Asia depends on considerable policy intervention, technological improvement, and investment in infrastructure.

PurposeThe purpose of the paper is to empirically examine the relationship between energy consumption and economic growth for a panel of five South Asian economies, namely, India, Pakistan, Bangladesh, Sri Lanka and Nepal over the period from 1971 to 2010 within a multivariate framework.Design/methodology/approachThe study uses Pedroni cointegration and Granger causality test based on panel vector error correction model to examine long-run equilibrium relationship and direction of causation in the short and long run between energy consumption and economic growth using energy inclusive Cobb–Douglas production function for a panel of five South Asia countries, namely India, Pakistan, Bangladesh, Sri Lanka and Nepal.FindingsPedroni’s panel cointegration test indicates the long-run equilibrium relationship between economic growth per capita, energy consumption per capita and real gross fixed capital formation per capita for panel. Further, 1 per cent increase in energy consumption per capita increases the gross domestic product (GDP) per capita by 0.8424 per cent for the panel. Causality results suggest bidirectional causality between energy consumption per capita, gross fixed capital formation per capita and GDP per capita in the long run and unidirectional causality running from energy consumption per capita and gross fixed capital formation per capita to GDP per capita in the short run.Practical implicationsThese South Asian countries should implement an expansionary energy policies through improving the energy infrastructure, energy efficiency measures and exploiting massive renewables’ availability for low-cost, affordable clean energy access for all, especially in the yet unserved rural and remote areas for further stimulating economic growth.Originality/valueImplementing energy efficiency measures and massive renewables development (wind, solar and hydropower) may help the affordable and clean energy access and reducing fossils fuel dependence and its associated greenhouse emissions in South Asia.

Nuclear energy consumption, commercial energy consumption and economic growth in South Asia: Bootstrap panel causality test

PurposeThe purpose of this paper is to explore the drivers of economic growth in South Asia region for the period of 1975–2016 using the World Bank data.Design/methodology/approachPanel corrected standard error (static estimation) approach and one-step system generalised method of moments (dynamic estimation) approach are used.FindingsBoth the static and dynamic estimations indicate that energy use, gross capital formation and remittances are the main drivers of economic growth in South Asian countries. The effects of all these variables are positive and significant. The extent of the effect of energy use is much higher than that of other two variables on the economic growth. A 1 per cent increase in the growth of energy consumption can expedite the gross domestic product growth by approximately 3 per cent in South Asia. However, the key variables, such as trade, government expenditure and foreign direct investment demonstrate no significant effect.Originality/valueThe current research is original in the sense that it investigated the issue with a new data set using improved econometric techniques. Moreover, in South Asia as a whole, this kind of study is totally absent, particularly with panel data of a large number of years. Furthermore, this study has taken into account the problem of heterogeneity and the biases created by cross-section dependence, which were mostly absent in previous studies. Therefore, the findings of this research are new contributions to the existing literature.

We investigate the proximate determinants of economic growth in South Asia from 1996 to 2010. The study is conducted in a panel data framework with a special emphasis on the role of institutions in conjunction with physical capital stock, human capital stock and openness as the major predictor variables. Moreover, we also attempt to ascertain the direct and indirect effects of corruption on the economies in South Asia and thereby estimate the effects of various constraints that could restrict high growth in the region in the near future. Human capital stock and openness are crucial to the region’s economic growth, but institutions need substantial reform if the accelerated growth rates are to be sustained. The impact of physical capital stock is subject to each country’s institutional quality. Corruption is found to have a negative influence on the economies of South Asia, and its interplay with weak institutions tends to magnify this adverse impact. In the future, institutional reform should be directed towards curbing the ill effects of corruption to sustain the growth of South Asian countries.

South Asia is one of the fastest growing regions in the world during the last two decades. This growth momentum has been fuelled by carbon-intensive fossil fuels as reflected through the expansion in fossil fuel utilization in the total energy mix of 60.5 per cent on average for the period 1996-2000 to 70.3 per cent by 2011-2015. Against this backdrop, the study intended to identify the relationship between energy consumption and economic growth in South Asia to recognize the feasibility of promoting low-carbon economic progress in the future. The study employed annual data for the period from 1971-2014 for five selected South Asian countries. The unit root test results indicate that all the variables are stationary at their first difference and the four statistics of the Pedroni cointegration test indicate the existence of a long-run relationship between the variables. The FMOLS estimator implies the significance of the energy consumption in economic growth in the region where one per cent increase in energy consumption leads to a 0.78 per cent increase in economic growth. The study finds a strong bi-directional relationship between the core variables which illustrates the necessity to shift towards sustainable energy sources to achieve an undisrupted economic expansion with a minimum carbon footprint. Thus, the study lays the foundations to identify the aforementioned relationships and encourage the derive of sustainable energy solutions to fuel the growth in the region.

Excessive consumption of fossil fuel leading to high environmental cost and the possibility of exhaustion of these nonrenewable energies is a compelling man to switch to alternative energy sources. These resources include renewable energies that are clean and sustainable. Renewable energy is such energy sources that are naturally replenished and are abundantly available. These energy sources beget from solar energy, wind, geothermal and hydro-power plants, etc. Therefore, instead of growing reliance on declining underground resources (fossil fuel resources), it must invest in the development of renewable energy utilization. This paper aims to provide renewable energy consumption patterns, in the long run, incorporating economic growth and fossil fuel energy consumption. In this analysis four, South Asian counties have been taken. These are Bangladesh, India, Pakistan, Sri-Lanka. By analyzing the data from 1990 -2014 with the Johansen Co-integration Method, renewable energy consumption is negatively related to economic growth (except India), whereas fossil fuel energy consumption is increasing with economic growth in the long run for the mentioned South Asian counties. Considering the climate issues, we addressed the opportunities and challenges providing some policy recommendations to increase renewable energy consumption.

A study of the impact of military expenditures on economic growth and development examines the differences in the results of previous studies which led to contradictory conclusions. The authors find that these differences are due to sample variations, specificational choices, and the different time periods examined. The data indicate that there is no consistent, statistically significant connection between military spending and economic growth. Augmentation of the models suggests that military expenditures neither help nor hurt economic growth to any significant extent. 2 tables.

It is frequently asserted that high levels of economic growth are supported by economic freedom. For the period 1995–2021, this study examines the influence of the composed economic freedom index and several subcomponents of economic freedom on the economic growth of four South Asian economies, namely Bangladesh, India, Pakistan, and Sri Lanka. The Ordinary Least Squares, Random Effect Model, and Robust Least Squares approaches are utilized to estimate the composed and decomposed influence of economic freedom on economic growth. Robust Least Squares reflects the robustness of the connection between economic liberty and growth. According to the results of these tests, economic liberty has a strong and favorable stimulus on growth. When the different indicators of economic liberty are evaluated independently, we discovered that the magnitudes of most economic freedom indicators are significant. Conversely, monetary freedom contributes very little to economic expansion. The effects of government spending, public trust, and labor flexibility on economic expansion are hypothetical. The tax load hinders economic expansion in the economies under consideration. Property rights, freedom to do business, trade liberty, investment choice, and financial liberty all have a positive, strong, and sizeable stimulus on economic growth. The decomposed influence of each indicator of economic freedom will help develop policy choices.

This research thesis investigates the effects of the short run and long run causal link (Granger causality relationship) between energy consumption, economic growth and carbon emissions in Nigeria (using Nigerian data over the period 1980 – 2009) including labor, investment in gross fixed capital formation, trade openness, total expenditure on education and labor force in the model. The Augmented Dickey Fuller (ADF) and Philip Perron (PP) Test were employed to examine the stationary state of the data while the Johansen co-integration test was employed to determine if there exist a long run relationship among the variables before estimating the model. The stationary test results indicate that none of the variables are stationary at levels in both tests while the cointegration results indicate that there are four co-integrating equations associated with our variables. Furthermore, applying the techniques of VECM version of Granger causality to find whether there exist a bi-directional or uni-directional causality between energy consumption, economic growth and carbon emissions in the short and long run. The statistical findings indicate that a neutral hypothesis holds in the short run (economic growth and energy consumption and carbon emissions are not related) and a bi-causal relationship holds in the long run between economic growth and energy consumption. This result does not suggest the existence of an EKC hypothesis in the long run, however, the standard polynomial functions (linear, quadratic and cubic) were estimated to confirm the existence of the EKC (‘U’) curve or ‘N’ shape curve and to find the main driving forces affecting carbon emissions patterns and the relationship between economic growth and carbon emissions. After conducting further diagnostic tests (ARCH test, normality test of residual term, white heteroscedasticity and model specification test- ramsey reset test) to determine the correctness of the specification of our model or robustness of our model, the emerging results prove that none of the variables influences carbon emissions in the long run including GDP and thus no EKC (‘U’) curve or ‘N’ shape curve was obtained. Therefore, the conclusion from our study is that although in the short run no causality is found between economic growth, energy consumption and carbon emissions, there is a strongly interdependent relationship between economic growth and energy consumption in the long run. Hence, proper environmental and energy policy should be adopted at appropriate time to protect natural capital (environment) which may control the vulnerability of climate change.

In today's highly advanced industrialised and modernised world, China's economy is still growing, and its demand for energy is increasing daily. It is crucial to examine the connection between energy consumption, carbon emissions, and economic growth in order to promote economic growth based on energy conservation and emission reduction. Using Dezhou City in Shandong Province as an example, the study builds a VAR model of carbon emission, energy consumption, and economic growth in Dezhou City based on simplified macroeconomic sub-models, energy sub-models, and environmental sub-models. It then determines the correlation and influence mechanism between the three using tests like ADF unit root and Granger causality. The pertinent elements affecting Dezhou's carbon emissions were then investigated using grey correlation analysis. Finally, based on the study's findings, policy suggestions are made regarding energy use, carbon emissions, and economic expansion. It is necessary not only to restrain high-energy consumption industries and fundamentally optimize the energy consumption structure, but also to find new economic growth points and improve economic growth channels, so as to optimize the industrial structure. In this process, increasing the proportion of the tertiary industry is a key measure. In addition, the government needs to advocate the citizens to adopt a low-carbon lifestyle, and the concept of low-carbon environmental protection will be deeply rooted in the hearts of the people. This study will provide suggestions and theoretical guidance for China's energy consumption and carbon emissions, and help achieve high-quality growth of China and even the world economy.

PurposeThis study aims to investigate the interplay between renewable energy development, unemployment and GDP growth within Bangladesh, India, Pakistan and Sri Lanka. The research underscores the significant role of renewable energy plays in stimulating economic growth and mitigating unemployment, offering crucial policy insights for sustainable growth in South Asia.Design/methodology/approachUtilizing the autoregressive distributive lag (ARDL) framework and Toda Yamamoto causality through the vector autoregressive (VAR) approach, the study analyzes the long-term and short-term impacts of these variables from 1990 to 2019.FindingsThis study reveals a significant co-integration among renewable energy consumption, unemployment and GDP growth in selected South Asian countries. The long-term estimation shows renewable energy consumption influences negatively economic progression in Bangladesh, with no notable correlation with unemployment. In contrast, Sri Lanka demonstrates an optimal relationship among all the variables. Short-run assessments reveal a significant positive relationship between renewable energy consumption and economic growth in India, while an inverse relationship is evident in Pakistan. Moreover, the relationship between unemployment and economic progression, the result shows a negative and significant relationship in India and Sri Lanka.Research limitations/implicationsThe study emphasizes the need for policy development concerning renewable energy development, unemployment reduction and sustainable economic growth in South Asia. While limitations exist, future research can expand upon this work by incorporating varied data, additional countries or alternative modeling techniques.Originality/valueThis research offers a unique exploration into the multidimensional impacts of renewable energy consumption, unemployment and economic growth in the South Asian context, an area previously unexplored in such depth.