The Influence of Energy Consumption, Economic Growth, Industrialisation and Corruption on Carbon Dioxide Emissions: Evidence from Selected Asian Economies

Abstract

Using the Environmental Kuznets Curve (EKC) hypothesis as a theoretical framework and applying Estimated Generalised Least Square (EGLS) approach, this chapter examines the impact of energy consumption, economic growth, industrialisation and corruption on carbon dioxide emissions as well as finds out the causal relationship among them using panel data of 10 Asian economies over the period 1980–2019. Our empirical findings from EGLS model suggest that there exists an ongoing rising relationship between CO2 emissions and economic growth both in the short-run and long-run which is opposing to what is claimed by the EKC hypothesis. Moreover, per capita CO2 emissions rise positively with respect to increase in energy consumption, urbanisation, gradual industrialisation and growth in urban population in the long-run. Moreover, countries with adoption of more corruptive practices are found to have causing more environmental degradation through excessive emission of carbon dioxide in the long-run. The study also indicates the existence of unidirectional causalities running from carbon dioxide emission to energy consumption, from industrialisation and urban population growth to per capita CO2 emissions, from industrialisation to GDP growth per capita and bidirectional causality between financial development and economic growth via GDP growth per capita. Therefore, these unidirectional causalities entail that CO2 emission reduction or abatement measures can be applied without having any unpleasant effect on the real industrialisation, energy consumption and urbanisation in selected Asian countries.