Effect of GDP, Energy Consumption, and Material Consumption on Waste Generation: The Case of EU-28 Countries

Abstract

Controversy encompassing economic growth and waste generation into the economic system–environmental implication nexus usually jolts many experts, academic elites, policy makers, and others out of belief. This is because hazardous waste has detrimental effect on health and environment. The leading school of thought argues that economic growth creates much waste and thus exacerbates problems with environment. The contribution of waste into the economic system can also be ascribed to increasing material consumption. Hence, this chapter focusses on the causal relationship among economic growth, energy consumption, and material consumption on waste generation. Here we used panel cointegration tests to demonstrate that cointegration is present among total waste, GDP, energy consumption, and material consumption. The results of panel vector error correction models indicate that there is a unidirectional short-run effect running from material consumption to waste generation. In addition, there is a unidirectional long-run Granger causality running from GDP, energy, and material consumption to waste generation into the economic system. However, no short-run causality running from GDP and energy consumption to waste generation was observed. This implies that waste generation will not change even if GDP and energy consumption increase suggesting that the EU-28 countries represent a successful case of waste management.