Economic Growth Energy Consumption Research Articles

The Prodigious Need for Fueling South Asian Economies through Sustainable Energies

South Asia is one of the fastest growing regions in the world during the last two decades. This growth momentum has been fuelled by carbon-intensive fossil fuels as reflected through the expansion in fossil fuel utilization in the total energy mix of 60.5 per cent on average for the period 1996-2000 to 70.3 per cent by 2011-2015. Against this backdrop, the study intended to identify the relationship between energy consumption and economic growth in South Asia to recognize the feasibility of promoting low-carbon economic progress in the future. The study employed annual data for the period from 1971-2014 for five selected South Asian countries. The unit root test results indicate that all the variables are stationary at their first difference and the four statistics of the Pedroni cointegration test indicate the existence of a long-run relationship between the variables. The FMOLS estimator implies the significance of the energy consumption in economic growth in the region where one per cent increase in energy consumption leads to a 0.78 per cent increase in economic growth. The study finds a strong bi-directional relationship between the core variables which illustrates the necessity to shift towards sustainable energy sources to achieve an undisrupted economic expansion with a minimum carbon footprint. Thus, the study lays the foundations to identify the aforementioned relationships and encourage the derive of sustainable energy solutions to fuel the growth in the region.

Does energy consumption play a key role? Re-evaluating the energy consumption-economic growth nexus from GDP growth rates forecasting

Given the strong link between economic growth and energy consumption, we construct a new set of energy consumption indices (ECI) to forecast GDP growth rates. The findings demonstrate the strong predictive power of the new indices. In particular, the electricity consumption index from the industrial sector has an excellent predictive performance and deserves the attention of the government and academia to help formulate economic growth targets. The mixed-frequency model with the Least Absolute Shrinkage and Selection Operator approach (MIDAS-LASSO) enables the full exploitation of energy consumption information for stable forecasting performance, even in the context of crisis fluctuations and geopolitical risk shocks. Furthermore, we apply forecast encompassing tests and variable selection to statistically investigate the predictive information. By analyzing energy consumption characteristics, we contribute to the economic growth hypothesis at the level of energy consuming sectors and provide new insights into GDP forecasting.

Examination of carbon dioxide emissions and renewables in Southeast Asian countries based on a panel vector autoregressive model

Recently, the increasing energy consumption for economic growth has resulted in higher carbon dioxide (CO2) emissions. In this regard, the reduction of such emissions has become one of the main targets of economic planning for both developed and developing countries. Thus, this study determines whether economic growth and increased energy consumption can have a significant impact on CO2 emissions and whether this relationship is mutual, bidirectional, or unidirectional. For this purpose, we employ a panel autoregressive (VAR) model and focus on a group of developing countries in Southeast Asia in which their economic and population growth are expected to increase CO2 emissions in the future. Additionally, we examine their difficulties in meeting the CO2 emission targets and consider modern renewable energy sources (RES) in our quantitative research. Based on the results, there have been various rebound effects and rising expenses for modern RES in these countries, which have hampered their long-term goal of reducing CO2 emissions. The implication of the findings is that it is important to tailor subsidy schemes and energy policies to the specific needs of developing countries and their respective populations.

The Energy Consumption-Economic Growth Nexus in Nigeria: What Evidence Exists?

The study investigated the energy consumption-economic growth nexus in Nigeria. Specifically, the study aimed to establish a comprehensive understanding of the nexus and causality between the variables in Nigeria. The study’s significance is highlighted in the context of various energy policies implemented in Nigeria, including the elimination of fuel subsidies. In order to accomplish the goals of this research, data spanning the period 1980 to 2022 were utilised in the study. Additionally, various econometric techniques, including the autoregressive distributed lag (ARDL) technique and the causality test, were adopted in order to estimate the relationship and causality between the variables. This approach has several advantages especially given variables that were integrated of order, I(0), I(1) or the combination of both. The method used in this study is also extremely resilient in establishing a strong and uninterrupted correlation between variables. The results of the research uncovered various important discoveries, one of which highlights the presence of a lasting connection between energy consumption and economic growth in Nigeria. Specifically, the study showed the presence of co-integration between energy consumption and economic growth. The study also demonstrated that in the event of an economic shock or destabilisation, the economy will take a relatively longer time period to re-establish equilibrium. Additionally, the outcomes of the study implied that energy consumption had a short- and long-term beneficial influence on growth. The study therefore suggested the implementation of an effective energy strategy that promotes sustainable consumption, so facilitating a prompt return to equilibrium in the event of an economic shock. The study showed novelty in that, unlike previous studies in Nigeria which has placed more emphasis on the impact or the effect of energy consumption on economic growth, it examined both the short- and long-run nexus, as well as the causality among the variables. This importance of the study cannot be overemphasised given the structural imbalances in Nigerian energy sector.

Renewable Energy Consumption-Economic Growth Nexus in Saudi Arabia: Evidence from a Bootstrap ARDL Bounds Testing Approach

The paper investigates the relationship between Saudi economic growth, renewable energy consumption and trade openness during the 1980-2017 period. By using the Bootstrap Autoregressive Distributed Lag (BARDL) approach and the Granger causality analysis, the results prove the existence of a cointegration relationship between the considered variables. In order to test for Granger causality in the presence of cointegration among the variables, the results indicate that there is a short-run unidirectional causality running from GDP to trade openness. Thus, a bidirectional causality is detected both between (REC-TOP) and between (PIB-REC). In contrast, in the long run, there is a one-way causal relationship running from renewable energy consumption, trade openness to economic growth. These new findings will help policymakers and government officials better understand the role of renewable energy and economic growth in Saudi Arabia's development.

Does Energy Consumption Play a Key Role? Re-evaluating the Energy Consumption-Economic Growth Nexus From GDP Growth Rates Forecasting

Does Energy Consumption Play a Key Role? Re-evaluating the Energy Consumption-Economic Growth Nexus From GDP Growth Rates Forecasting

Realizing the Sustainable Development Goals through technological innovation: juxtaposing the economic and environmental effects of financial development and energy use.

The BRICS comprise of group of emergingmarket economies which are committed to achieving the Sustainable Development Goals agenda of the United Nations by the end of the year 2030. In this regard, it is critically important for these nations to sustain their annual rise in theireconomic growth rates while simultaneously declining the rate of discharge ofcarbon dioxide emissions. Against this backdrop, this study aims to investigate how financial development, greaterprimary energy consumption, and technological innovation affect the prospects of the BRICS nations in achieving economic and environmental sustainability. Considering the period from 1990 to 2020 and utilizing methods that are robust to working with cross-sectionally dependent, heterogeneous, and endogenous panel data, the key analytical findings derived in this study reveal that higher levels offinancial development, primary energy consumption, and technological innovation boost the per capita economic growth rates of the BRICS nations. Besides, technological innovation also moderates the financial development-economic growth and theprimary energy consumption-economic growth nexuses by jointly boosting economic growth rates with these two macroeconomic variables. On the other hand, financial development and higher primary energy consumption are seen to boost the annual per capita carbon dioxide emission growth in these emerging nations, while technological innovation is observed to do the opposite. Furthermore, technological innovation is witnessed to moderate the nexus between energy use and economic growth to further reduce theemission growth ratein the BRICS nations. Accordingly, a set of policies are recommended to the concernedgovernments in order to enable the BRICS nations to attain the Sustainable Development Goalsagenda.

Revisiting the relationship between remittances and CO2 emissions by applying a novel dynamic simulated ARDL: empirical evidence from G-20 economies.

The current study looks at the causes of carbon dioxide (CO2) emissions by considering the implications of remittances in the presence of economic growth, financial development, and energy consumption in the case of selected four G-20 economies over the period 1990-2019. This study first uses the dynamic simulated ARDL model to stimulate, estimate, and plot to predict graphs of negative and positive changes occurring in the variables along with their short-run and long-run relationships. Results of the ARDL bounds test confirm a long-term relationship among remittances, financial development, economic growth energy consumption, and CO2 emissions. Furthermore, the error correction model (ECM) also confirms the long-run relationship among CO2 emissions, remittances, financial development, economic growth, and energy use. The results of a novel dynamic simulated ARDL disclosed that financial development is completely connected to CO2 emissions in Mexico and India in the long run. On the other hand, results confirm that there is a positive relationship between remittances and CO2 emissions in the case of Australia, Germany, and India, but this relationship is insignificant with CO2 emissions in the case of Mexico. The result further disclosed that renewable energy exerts a significant impact on CO2 in Australia, Mexico, India, and Germany in the long run while remittances wield a significant impact on CO2 emissions in Australia, Mexico, and India. Moreover, the findings concluded that GDP has significant nexus with CO2 in the long run in the case of Australia, Mexico, and Germany. This study uses up new visions for the economies of G-20 countries to sustain financial and economic growth by protecting the environment from pollution through its efficient national environmental policy, fiscal policy, and monetary policy.

Study on Coupling and Coordinated Development of Ecological Environment-Energy Consumption-Regional Economic Growth in Greater Bay Area around Hangzhou Bay

Environment, energy, and economy often constitute an interrelated and contradictory ternary system. In this study, Greater Bay Area around Hangzhou Bay Area is taken as the main research object, and Guangdong-Hong Kong-Macao Greater Bay Area is taken as the reference object. By constructing the index system of 3E system coordination evaluation model, the coordination degree and coordination status of ecological environment, energy consumption, and economic growth subsystems of the two areas are compared and analyzed, and the coupling relationship between 2E and 3E systems of Greater Bay Area around Hangzhou Bay and Guangdong-Hong Kong-Macao Greater Bay Area is further studied. The results show that the eco-environmental coordination degree and energy consumption coordination degree of the cities in Greater Bay Area around Hangzhou Bay are between 0.4248–0.5668 and 0.4528–0.5874, respectively, which are in the state of weak coordination to primary coordination, while the economic growth coordination degree is between 0.5022 and 0.6878, which is in the state of primary coordination to intermediate coordination. The coupling of 2E system in Greater Bay Area around Hangzhou Bay and Guangdong-Hong Kong-Macao Greater Bay Area shows linear growth and nonlinear growth, respectively (R2 = 0.997), presenting a good coupling development overall. The coupling levels of ecological environment-energy consumption, ecological environment-economic growth, and energy consumption-economic growth in Greater Bay Area around Hangzhou Bay increase by 18.94, 86.72, and 98.20% respectively. The coupling of 3E systems between Greater Bay Area around Hangzhou Bay and Guangdong-Hong Kong-Macao Greater Bay Area presents a nonlinear development trend that is increasing year by year (R2 > 0.99), but the coupling level of 3E systems between the two is still low, both of which are in the primary/weak coordination state, while the overall growth rate of 3E system coupling in Greater Bay Area around Hangzhou Bay is higher than that of Guangdong-Hong Kong-Macao Greater Bay Area.

Investigating the validity of the agricultural-induced environmental Kuznets curve (EKC) hypothesis for Ghana: evidence from an autoregressive distributed lag (ARDL) approach with a structural break

PurposeThe purpose of this research is to examine the validity of the agriculture-induced environmental Kuznets curve (EKC) hypothesis with evidence from an autoregressive distributed lag (ARDL) approach with a structural break including real income and energy consumption in the model for Ghana over the period 1980–2014.Design/methodology/approachThe ARDL approach with a structural break was used to analyze the agriculture-induced EKC model which has not been studied in Ghana. The dynamic ordinary least squares (DOLS), canonical cointegration regression (CCR) and fully modified ordinary least squares (FMOLS) econometric methods were further used to validate the robustness of the estimates, and the direction of the relationship between the study variables was also clarified using the Toda–Yamamoto Granger causality test.FindingsThe ARDL results revealed that GDP, energy consumption and agricultural value added have significant positive effects on CO2 emissions, while GDP2 reduces CO2 emissions. The Toda-Yamamoto causality test results show a bidirectional causality running from GDP and energy consumption to CO2 emissions whereas a unidirectional long-term causality runs from GDP2 and agriculture value-added to CO2 emissions.Practical implicationsThis finding validated the presence of the agriculture-induced EKC hypothesis in Ghana in both the short run and long run, and the important role of agriculture and energy consumption in economic growth was confirmed by the respective bidirectional and unidirectional causal relationships between the two variables and GDP. Thus, a reduction in unsustainable agricultural practices is recommended through specific policies to strengthen institutional quality in Ghana for a paradigm shift from rudimentary technology to modern sustainable agrarian technologies.Originality/valueThis study is novel in the EKC literature in Ghana, as no study has yet been done on agriculture-induced EKC in Ghana, and the other EKC studies also failed to account for structural breaks which have been done by this study. This study further includes a causality analysis to examine the direction of the relationship which the few EKC studies in Ghana failed to address. Finally, dynamic ordinary least squares (DOLS), canonical cointegration regression (CCR) and fully modified ordinary least squares (FMOLS) methods are used for robustness check, unlike other studies with single methodologies.

A survey of literature on energy consumption and economic growth

This study is a meta-analytic investigation of energy consumption and economic growth. It makes a literature survey on the dynamic causal relationship between broad variables of energy and economic growth for the period 1974–2021. The objective of this study is to investigate stationarity, cointegration and direction of causality between energy consumption and economic growth. It uses survey methods to profile related literature of the energy consumption–economic​ growth nexus. It tests four established hypotheses, feedback, growth, conservation and neutrality. It concentrates on both country as well as multi-country panel based studies. The variables chosen, econometric as well as theoretical models, time periods has contributed to the increased level of disagreement. The results are thoroughly mixed with no agreement, some studies are explicit on the degree to which results are contentious. There is no consensus for both country specific as well as panel based studies. On the whole the growth hypothesis is the most dominant outcome for country based studies. Our findings indicate that this debate is inconclusive with growth hypothesis accounting for 43.8%, feedback 18.5%, conservation 27.2%, and neutrality hypothesis 10.5% for country specific studies. This study gives a footprint of the state of the art and stimulates the level of debate for researchers on energy consumption and economic growth.

Dynamic Modeling of Causal Relationship Between CO2 emissions, Economic Growth, Energy Consumption and Foreign Direct Investment in The Gambia

Environmental degradation is a problem in developing countries. The use of non-renewable energy consumption for economic growth causes environmental degradation, but the consequences of environmental degradation cannot be ignored. The aim of the study was to understand relationship between CO 2 (Carbon dioxide) emissions, economic growth, energy consumption and Foreign Direct Investment (FDI) in The Gambia for the period from 1980 to 2019. To investigate the relationship between the variables, cointegration and granger causality are used. The findings support the existence of long-run equilibrium between the variables. The empirical results reveal that energy consumption positively influences CO 2 emissions in short-run. Moreover, in the long-run, energy consumption and FDI influence CO 2 emissions. The results of the study also reveal that there are two-way causalities between CO 2 emissions and economic growth, and between energy consumption and economic growth in both short-run and long-run in The Gambia. Therefore, policies aimed at increasing energy efficiency, as well as the adoption and utilization of renewable energy sources to replace old traditional energy sources such as charcoal, firewood, gas, and oil, are critical in reducing CO 2 emissions in the country while also sustaining economic development. Keywords: CO 2 (carbon dioxide) emissions, Economic growth, Energy consumption, Foreign direct investment, The Gambia DOI: 10.7176/DCS/11-6-03 Publication date: June 30 th 2021

Does Energy Consumption, Economic Growth, and Foreign Direct Investment Contribute to CO2 Emission? Evidence from Bangladesh

This work used the Johansen Cointegration Test and the Vector Error Correction Model (VECM) cointegration methodology to assess the long-run cointegrating relationship and short-run dynamics in Bangladesh between energy consumption economic growth, foreign direct investment, urbanization, population growth, and carbon emissions. To assess the long-term association between these variables, we examined data from 1972 to 2014, and empirical estimation revealed that all factors are significant at the 1% level of significance in the case of Bangladesh. Thus, energy consumption, economic growth, foreign direct investment, urbanization, population growth, and carbon emissions all have shown the predicted sign and are statistically significant, indicating that increased energy consumption, gross domestic product, and population increase all are responsible for increased carbon emissions in Bangladesh. Higher FDI inflows, on the other hand, cut per capita carbon emissions in Bangladesh. On the other hand, the empirical outcome has revealed that there is no substantial causal association between carbon emissions and urbanization. Keywords: CO 2 ; FDI; GDP; population growth; energy consumption; VECM DOI: 10.7176/JESD/12-12-05 Publication date: June 30 th 2021

INVESTIGATING THE CAUSAL LINKAGE AMONG ECONOMIC GROWTH, ENERGY CONSUMPTION, URBANIZATION AND ENVIRONMENTAL QUALITY IN ASEAN-5 COUNTRIES

The present study aims to explore the causal relationship among economic growth energy consumption and urbanization and environmental quality in ASEAN-5 countries. The current study conduct time series analysis in ASEAN-5 countries using the granger casualty model consisting data set from 1980 to 2018. The outcomes of the present study reveals that the energy consumption urban population granger cause to CO2 emission in ASEAN-5 countries. The study suggested that ASEAN-5 should reduce the utilization of fossil fuel based energy and induct robust policies towards augmenting the adeptness of renewable energy and energy-usage programs to condense redundant energy waste. Keywords: Economic growth, energy consumption, environmental quality, CO2 emission, environmental sustainability, ASEAN-5 JEL Classifications: F64, N75, O13 DOI: https://doi.org/10.32479/ijeep.11213

Re-evaluating the asymmetric conventional energy and renewable energy consumption-economic growth nexus for Pakistan.

To understand the nexus between economic growth and energy sources, in this study, we have selected Pakistan and collected data over the period 1980-2016. The neoclassical production function of Pakistan is augmented with conventional and renewable energy, capital, and labor. Conversely, the conventional and renewable models are being constructed by using GDP as an independent variable. This paper applied linear and nonlinear ARDL models to see whether the influence of conventional and renewable energy consumption on GDP per capita of Pakistan is symmetric or asymmetric and vice versa. Furthermore, the asymmetric causal effects between the energy variables and economic growth are also discussed. From the findings of the study, we deduce the long-run asymmetric effects of renewable energy on the economic growth of Pakistan. Similarly, the asymmetric effects of GDP, in the long run, are confirmed in both energy models. The symmetric and asymmetric causality results have recommended growth and conservation hypothesis. The findings propose that renewable energy is a significant factor in boosting the economic growth of Pakistan and a decline in the use of renewable energy could actually stem the economic growth of Pakistan.

Energy Supply Security Index: An Analysis for Turkish Economy

Energy consumption in Turkish economy has been rising continuously and composition of energy mix will be substantially changed in forthcoming periods due to environmental concerns and economic sustainability. On the other hand, energy shortage expected to increase because of accelerating economic activities and increase in population. In addition, structure of energy markets and demand/supply balance in Turkey are closely related with financial stability (current account deficit). Therefore, there is need to balance between energy consumption-economic growth and environment duality in energy policy. Conversely, any disruptions in energy supply will lead to destabilize economy, interruption in output and suspend social life in the long term. Accordingly, rising and ennsuring energy security would be helpful for Turkish economy. In this frame we assesed energy security in line with Cabalu (2010) on the basis of energy intensity, import dependency, domestic production and geopolitical risk indicators. Lastly, we derived a composite security index from them. Results showed that Turkey is vulnerable in terms of fossil fuels due to insufficient domestic production and huge share in the national energy mix. On that note, policy makers can target possible sources of supply disruptions and mitigate their effects by taking measures against risks in energy security.

Energy consumption–economic growth nexus within the purview of exogenous and endogenous dynamics: evidence from Bangladesh

AbstractThis paper investigates the nexus between energy consumption and economic growth in Bangladesh over the period 1971–2018 using the autoregressive distributed lag (ARDL) approach to cointegration. The main contribution of this study is the inclusion of exogenous dynamic (globalisation) and endogenous factor (political risk indicator measured by political terror scale (PTS)) to the energy consumption–economic growth nexus. The study explores an energy consumption–economic growth nexus where globalisation and PTS have both positive and negative influences on this relationship in the short run and long run. The Toda–Yamamoto Granger causality test confirms the feedback hypothesis, that is bidirectional causal relationship between energy consumption and economic growth, and the result is further verified by the impulse response function. Therefore, policymakers should enhance the availability of energy for people and industries to continue the existing momentum of economic growth. Besides, the government should cautiously deal with both the globalisation and political risk issues about energy consumption–economic growth nexus in Bangladesh.

Revisiting Energy Consumption-economic Growth Hypothesis: Do Slope Heterogeneity and Cross-sectional Dependence Matter?

In this paper, the long-term nexus between energy consumption and economic growth is investigated using a panel data of 80 countries from World Bank data base for the period 1970 to 2017. In order to check for the issues of endogeneity, slope heterogeneity, and cross-sectional dependence present in errors of panel data, the study applied cross-sectional augmented autoregressive distributed lag (CS-ARDL) and cross-sectional augmented distributed lag (CS-DL) models to examine the long-term impact of energy consumption on economic growth. The empirical results revealed that energy consumption has a positive and significant long-run effect on economic growth and that cross-sectional dependence, slope endogeneity and heterogeneity are issues that should be on the watch when dealing with panel data of developing and developed countries’ analysis. Furthermore, the outcomes indicated that the impact of energy consumption on economic growth is stronger in less developed countries than in advanced economies. Technological progressions that give rise to the advancement of clean and efficient energy and substitution of low-quality fuels with high quality fuels are some of the possible channels that weaken the link between energy consumption and economic growth in advanced economies. Importantly, from a policy perspective, based on the study findings, energy conservation policies aimed at promoting environmental quality may worsen economic growth in developing countries, thereby adversely affecting their long-run economic growths.

The Implications of Renewable and Non-Renewable Energy Consumption for Economic Growth in Cameroon

Energy is widely considered a propulsive force for economic activity and industrial development. In this context, this paper aims at investigating the implications of renewable and non-renewable energy consumption for economic growth in Cameroon. To achieve this objective, used is made of time series data spanning the period 1971 - 2016 and an error correction. We find a long-run relationship between gross domestic product, renewable energy consumption, non-renewable energy consumption, gross capital formation and government expenditure. We also find that with the exception of non-renewable energy, these variables register positive and significant long-run effects on economic growth. However, once the two energy sources are interacted, the observed substitution-effect between renewable and non-renewable energy utilization enhances the direct impact of each energy source on economic growth. This indicates that renewable energy is a major driver of economic growth in the short- and long-run in Cameroon. These findings suggest that increasing the exploitation and use of renewable energy sources have implications for overall prosperity in developing country settings.

Driving mechanism and decoupling effect of PM2.5 emissions: Empirical evidence from China’s industrial sector

Haze pollution has been a serious environmental issue in China, however, little research has focused on the industrial sector which accounts for a large part of total PM2.5 emissions. This paper aims to disclose the driving mechanism and decoupling effect of industrial PM2.5 emissions. First, this study reveals the spatial-temporal drivers of industrial PM2.5 emissions in China spanning 2000–2014 through geographical detector and logarithmic mean Divisia index decomposition, respectively. Then, the decoupling causal chain of industrial economic growth and PM2.5 emissions is investigated by a refined Laspeyres index method. The empirical results illustrate that: (1) Population distribution is the dominating factor for the spatial heterogeneity of industrial PM2.5 emissions. Different influencing factors show significant synergistic effects. (2) Industrial development effect is the main reason for the increase of industrial PM2.5 emissions, while the reduction in industrial PM2.5 emissions is primarily due to energy intensity effect, followed by coal pollution intensity and energy mix effects. (3) During the study period, the PM2.5-economic growth decoupling undergoes two states, and shows the tendency towards strong decoupling. (4) The PM2.5-coal consumption effect and energy consumption-economic growth effect are important factors influencing the changes of PM2.5-economic growth decoupling indicator, while the impact of the coal consumption-energy consumption effect is quite small. This paper provides important implications for reducing industrial PM2.5 emissions.