Abstract
The present study is designed to investigate that how Economic Growth (EG) of the South Asian region has affected the Environmental Degradation (ED) from 1980 to 2018. This study has used Newey and West (1987) robust standard errors approach to overcome the problem of autocorrelation and heteroskedasticity in panel data. The results of the statistical model confirmed the existence of the Inverted U-shaped Environmental Kuznets Curve (EKC). Furthermore, the results also confirmed that the use of energy is also deteriorating the environment significantly. One significant contribution of the study is to check the causality between EG and CO2 by applying a relatively new approach namely Granger non-causality test presented by Dumitrescu and Hurlin (2012). The results confirmed that economic growth is contributing towards more CO2 emissions. The study concluded that South Asian countries should use environment-friendly renewable energy sources to achieve a higher growth rate.
Highlights
The alarming situation of Environmental Degradation (ED) after the industrial revolution of the 19th century drew the attention of international institutions like the World Bank to guide policymakers that all development policies should be integrated with environmental considerations
The World Bank’s notion that there exists a trade-off between Economic Growth (EG) and ED (World Bank, 1992) paved the way for researchers to empirically check the relationship between EG and environmental quality
In addition to the EG-ED relationship, a significant literature investigates the role of energy consumption towards ED and studies the nexus among energy consumption, ED, and EG (Ahmad et al, 2016; Bekhet and Lojuntin, 2020; Ito, 2017; Khan et al, 2020; Munir et al, 2020; Omri, 2013; Salari et al, 2021)
Summary
The alarming situation of Environmental Degradation (ED) after the industrial revolution of the 19th century drew the attention of international institutions like the World Bank to guide policymakers that all development policies should be integrated with environmental considerations. The World Bank’s notion that there exists a trade-off between Economic Growth (EG) and ED (World Bank, 1992) paved the way for researchers to empirically check the relationship between EG and environmental quality. After the pioneer studies of Grossman and Krueger (1995) and Holtz-Eakin and Selden (1995), a significant number of studies, based on the Environmental Kuznets Curve (EKC) hypothesis, show how EG first increase and gradually decrease the ED (Apergis and Ozturk, 2015; Ardakani and Seyedaliakbar, 2019; Dinda, 2004; Özokcu and Özdemir, 2017; Rahman et al, 2020). The present study is designed to test the EKC hypothesis and role of energy consumption on ED by highlighting some of the common In addition to the EG-ED relationship, a significant literature investigates the role of energy consumption towards ED and studies the nexus among energy consumption, ED, and EG (Ahmad et al, 2016; Bekhet and Lojuntin, 2020; Ito, 2017; Khan et al, 2020; Munir et al, 2020; Omri, 2013; Salari et al, 2021).
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