Study on Australian energy policy, socio-economic, and environment issues

Abstract

This article deals with the Australian total energy consumption related to economic growth and carbon dioxide (CO2) emission in which total energy consumption is sub-divided into renewable and non-renewable energy consumption. The aim of this study is to determine the nexus between all energy elements with gross domestic product and CO2 emission using the Cobb-Douglas equation. The study is based on the Australian panel data over the period from 1976–1977 to 2012–2013. Vector error correction model and generalized method of moments were used to estimate the variables for the relationship between energy variables. The proposed model shows good agreement with the data available on the bioenergy production and consumption in Organization for Economic Co-operation and Development countries. In this model, oil price, oil consumption, carbon tax, renewable energy technology, population growth, urbanization, etc., have been considered as model variables or governing factors. The results show the bidirectional relationship between energy consumption, economic growth, and CO2 emission. The proposed energy economic model is focused on resilient strategic investment decisions on CO2 emission intensive sectors like electricity generation and the transport sector. The model can be used to determine and understand the relationship between reduction of CO2 emission and economic growth in Australia.