Abstract
This study examines the dynamic relationship between energy use, income, and environmental degradation in Afghanistan using annual data from 1970 to 2016. The dynamic causal relationship among variables are being tested; grounded by four testable hypotheses (growth, conservation, feedback, and neutrality). The F-bounds test, Dynamic OLS, and VECM Granger causality are utilized. The empirical results confirm that there is a long-run relationship among the variables and the energy use and GDP both affects the CO2 emissions in the long run. The conservation and environmental policies would have detrimental impact to economic growth of Afghanistan, as this country become an energy dependent country. In the short run, there is bidirectional causality running from energy use and economic growth. These results support the “feedback hypothesis” and possesses some policy implications which suggests that economic development and energy use may be jointly determined since economic growth is closely related to energy consumption.Keywords: Causal relationship; F-Bounds test; Energy Consumption; Economic growth; CO2 emissions; AfghanistanJEL Classifications: Q2, Q4DOI: https://doi.org/10.32479/ijeep.8249
Highlights
All energy sources have some impact on our environment
Through applying a multivariate model of energy use, income, and carbon emission, the obtained results significantly rejected the “neutrality hypothesis” in the short-run, indicating that there was no causality between energy consumption and gross domestic product (GDP)
The policymakers have to consider the role of technology and innovation that can use energy efficiently in order to improve the economy without damaging the environment
Summary
Oil, and natural gas do substantially more harm than renewable energy sources by most measures, including air and water pollution, damage to public health, wildlife and habitat loss, water use, land use, and global warming emissions. In terms of global energy efficiency, its indicated that was a decline in global energy intensity where the rate of energy consumed per unit of economic output, slowed to only 1.7% 1 in 2017, much lower than the 2.0% improvement seen in 2016 (IEA, 2016). The increase in carbon emissions was the result of robust global economic growth of 3.7%, lower fossil-fuel prices and weaker energy efficiency efforts. These three factors contributed to pushing up global energy demand by 2.1% in 2017 (IEA, 2016)
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