Urbanization, Energy Consumption and Environmental Quality in Asian Countries

Abstract

The rate of urbanization has enhanced around the globe. By moving the production from less to more energy-intensive sources, increasing the rate of urbanization leads to more energy consumption. The major threat to the environment of the world is the increasing rate of greenhouse gas emissions and global warming. The main purpose of this study is to elaborate on the relationship between urbanization, energy consumption, and CO2 emission in Asian countries. In this study, CO2 is used as a dependent variable while urban population, population density, renewable and non-renewable energy consumption, GDP per capita growth, the square of GDP per capita growth, and trade are used as the independent variables. We have obtained data from 1980 to 2020 from 32 Asian countries. Data have been taken from the sources of the Energy Information Administration (EIA) and World Development Indicators (WDI). We have used the panel ARDL technique for the long-run and short-run estimation of variables. The findings of this study reveal that non-renewable energy has a positive but insignificant whereas per capita GDP growth, urban population, population density, and trade have a positive effect; and per capita square of GDP growth and renewable energy consumption has a negative and significant effect on CO2 emission. The findings of Granger causality show that there is uni-variate causality running from non-renewable energy consumption towards CO2 emission and from urban population to renewable energy. There is bi-variate causality running from renewable energy to CO2, non-renewable to renewable energy consumption, and from urban population to non-renewable energy consumption. There is no causality exists between the urban population and CO2 emission. This study suggests that the Government may adopt more energy conservation policies to reduce CO2 emissions. The government may suggest using the public transportation system rather than the private transportation system to mitigate CO2 emissions.