Modeling and forecasting 3E in Eastern Asia: a comparison of linear and nonlinear models

Abstract

In this article, we investigate with modeling of the CO2 emissions, energy consumption and economic growth (3E) in East Asian countries over the period 1985–2013 in order to forecast future projections using dynamic simultaneous-equation panel data and artificial neural network models. Our results show that there is bidirectional causality between economic growth and CO2 emissions, between energy consumption and economic growth, and there is unidirectional causality from energy consumption to CO2 emissions. They also indicate that ANN model is suitable model for future projections. Thus, the forecast results by ANN showed that energy demand and CO2 emissions in Eastern Asia continued to rise at the annual growth rates of 4.3 and 6.8 % over the next 12 years. The study reveals several interesting and useful managerial insights and implications.