Urbanization and the Consumption of Fossil Energy Sources in the Emerging Southeast Asian Countries

Abstract

Fossil energy consumption is considered a source of environmental degradation. While the demand for fossil energy increases during the process of urbanization, different nations rely upon different sources of fossil energy. As such, a one-size-fits-all approach in reducing the consumption of fossil fuels to improve the quality of the environment is neither logical, nor practical. This study investigates the short-term and long-term effects of urbanization in relation to fossil energy consumption from coal, gas and oil. The auto-regressive distributed lag (ARDL) is employed on the sample of five emerging ASEAN nations in the 1985–2018 period. The findings reveal that that urbanization in Indonesia, Malaysia and Thailand appears to be associated with an increase in coal consumption in the short run. In Vietnam, gas consumption will increase with urbanization. However, in the long run, urbanization in Thailand and Vietnam is linked to an increase in oil consumption. Urbanization in Indonesia, Malaysia and the Philippines leads to the reduction of coal consumption in the long run. Policy implications have emerged based on the findings of this study.