Does biomass energy consumption mitigate CO2 emissions? The role of economic growth and urbanization: evidence from developing Asia

Abstract

This study investigates the relationship among CO2 emissions, biomass energy consumption, economic growth and urbanization for a panel of 13 Asian developing countries. The panel cointegration tests suggest that there is a long-run equilibrium relationship among CO2 emissions, biomass energy consumption, economic growth and urbanization. The findings from the FMOLS estimation indicate that overall biomass energy consumption cannot reduce CO2 emissions. The results of panel causality tests show that there is a short-run unidirectional causality running from GDP to biomass energy consumption and a short-run one-way causality running from GDP and urbanization to CO2 emissions, respectively. As for the long-run relationship, the findings indicate that there is unidirectional causality running from CO2 emissions, biomass energy consumption and urbanization to GDP, respectively, implying that real GDP could play a key role in the adjustment process as the system departs from long-run equilibrium.