Energy Consumption, Carbon Emission and Economic Growth at Aggregate and Disaggregate Level: A Panel Analysis of the Top Polluted Countries

Abstract

Economic expansion leads to higher CODe2 emissions, which puts pressure on environmental degradation. More than 30% of carbon emissions are contributed by the top0polluting countries in the world through their energy consumption. Therefore, the current study examines the association between CO2 emissions, energy consumption, GDP and industrial production, along with other control variables at the aggregated and disaggregated levels for the top emitter countries for the 1990–2019 period. The short- and long-term results indicate that CO2 emissions are positively and significantly linked with energy consumption, except carbon emissions from the gas model, by employing the PARDL model using pooled mean group (PMG) analysis. Thus, gas consumption is less polluting to the environment than other sources of energy; therefore, countries need to reduce the consumption of coal and oil, which will lead to a decrease in CO2 emissions. This refers to the composition effect, which focuses on the use of clean energy instead of dirty energy in the production and consumption processes. The shift from oil or coal to gas in the production process will help to reduce the oil demand, which ultimately controls its consumption and prices, which may help to control the prices of various other goods and services.