Top PDF CO2 emissions, energy consumption and economic growth: Evidence from the Trans-Pacific Partnership

CO2 emissions, energy consumption and economic growth: Evidence from the Trans-Pacific Partnership

CO2 emissions, energy consumption and economic growth: Evidence from the Trans-Pacific Partnership

the Environmental Kuznets Curve (EKC). The papers introduces a novel variable to capture trade openness, which appears to be a crucial factor in inter-regional co-operation and development, in order to evaluate its effect on the environment, The empirical analysis is based on a sample of nine signatories to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) for the period 1971-2014, which is based on data availability. The empirical analysis is based on several time series econometric methods, such as the cointegration test, two long run estimators, namely the fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) methods, as well as the Granger causality test. There are several noteworthy empirical findings: it is possible to confirm the U-shaped EKC hypothesis for six countries, namely Australia, Canada, Chile, New Zealand, Peru and Vietnam; there is no evidence of the EKC for Mexico; a reverse-shaped EKC is observed for Japan and Malaysia, there are long run relationships among the variables, the adoption of either renewable energy, or alternative energy and nuclear energy, mitigates CO 2 emissions, trade openness leads to more beneficial than harmful impacts in the long
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Energy consumption, CO2 emissions and economic growth nexus: Evidence from panel Granger causality test

Energy consumption, CO2 emissions and economic growth nexus: Evidence from panel Granger causality test

In the literature, there are several studies, theoretical and empirical, which put the accent on the relationship between energy consumption, economic growth, and the emission of CO2 that may ex- ist. Empirically it has been tried to find the direction of causality between energy consumption and economic activities for some countries employing the Granger Test, ECM and other techniques. In recent papers, Zhang and Lin (2012) chowed that urbanization increases energy consumption and CO2 emissions in China using panel estimation. They proves that the effects of urbanization on en- ergy consumption vary across regions and decline continuously from the western region to the central and eastern regions. Shyamal and Rabindra (2004) examined the different direction of causal rela- tion between energy consumption and economic growth in India through a co-integration technique combined with the Granger causality test. They find the existence of a bi-directional causality be- tween energy consumption and economic growth. Wang et al. (2016) used a co-integration approach in China data to examine the relation between economic growth, energy consumption and CO2 emis- sion. Granger causality test identified a bi-directional causal relationship between economic growth and energy consumption, and a uni-directional causal relationship was found to exist from energy consumption to CO2 emissions. Saidi and Hammami (2015) studied the impact of energy consump- tion and CO2 emission on economic growth for 58 countries. They have used simultaneous equations models estimated by the GMM-estimator and they find evidence that energy consumption has a pos- itive impact on economic growth and that the CO2 emissions have a negative impact on economic growth.
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On the causal dynamics between economic growth, renewable energy consumption, CO2 emissions and trade openness: Fresh evidence from BRICS countries

On the causal dynamics between economic growth, renewable energy consumption, CO2 emissions and trade openness: Fresh evidence from BRICS countries

In a series of studies, Apergis and Payne (2010a, 2010b, 2011a, 2011b, 2011c, 2012) investigate the causal relationship between renewable energy consumption and economic growth for many groups of countries ranging from developed to developing countries. The authors use various cointegration techniques and causality approaches within a panel data framework. In the majority of cases, empirical results reveal that cointegration relationships and both short-run and long-run bi-directional causality exist among variables in question, proving the validity of the feedback hypothesis. Employing a panel error correction model within a multivariate model, Apergis et al. (2010) examine the causal relationship between CO2 emissions, nuclear energy consumption, renewable energy consumption and economic growth for a panel of nineteen developed and developing countries aver the period 1984- 2007. Empirical evidence shows that there exists short-run bi-directional causality between renewable and nuclear energy consumption and economic growth, supporting therefore the feedback hypothesis. The long-run analysis reveals the existence of a unidirectional causality running from the consumption of both nuclear and renewable energy to economic growth, which suggests the validity of the growth hypothesis.
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CO2 Emissions, Energy Consumption and Economic Growth Nexus in MENA countries: Evidence from Simultaneous Equations Models

CO2 Emissions, Energy Consumption and Economic Growth Nexus in MENA countries: Evidence from Simultaneous Equations Models

Compared to previous studies (see table1), this paper used simultaneous equations based on structural modeling to study of the nexus between energy consumption, CO2 emissions and economic growth in the Middle East and North Africa (MENA) region. As we can see, about the emerging economies, our literature review generally indicates that little attention has paid to smaller emerging economies, particularly in MENA region. This region has some of the largest energy reserves in the world. Yet, while the region is trying to industrialize and modernize its economies, there are the challenges of the carbon emissions. Moreover, energy consumption is the most significant source of pollution and, in terms of particulate matter concentrations; MENA represents the second most polluted region in the world – after South Asia – and the highest CO 2 producer per dollar of output. The model allows examining at the
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Modeling Energy Consumption, CO2 Emissions and Economic Growth Nexus in Ethiopia: Evidence from ARDL Approach to Cointegration and Causality Analysis

Modeling Energy Consumption, CO2 Emissions and Economic Growth Nexus in Ethiopia: Evidence from ARDL Approach to Cointegration and Causality Analysis

Three research aspects in literature exist on the relationship between economic growth, energy consumption and environmental pollutants (Acaravci & Ozturk, 2010a; Alkhathlan & Javid, 2013; Jafari, Ismail, Othman, & Mawar, 2015; Baek & Kim, 2011). The first aspect, which is considered as one of the most significant empirical relationships tested in the economic literature, focuses on the relationships between economic growth and environmental pollutants: Farhani , Shahbaz , Sbia , and Chaibi (2014), Akpan and Abang (2015), Dinda and Coondoo (2006), Odhiambo (2011), Paresh and Narayan (2010), Kim , Lee , and Nam (2010), Kim and Baek (2011), Ghosh (2010) and others. The main aim of these studies are testing the validity of the environmental Kuznets curve (EKC) hypothesis which claims an inverted U-shaped relationship between the level of environmental degradation and income growth. This is to mean that environmental degradation increases with per capita income during the early stages of economic growth, and then declines with per capita income after arriving at a threshold (Acaravci & Ozturk, 2010a; Saidi & Hammami, 2015). The first empirical evidences on EKC hypothesis appeared in three independent seminal working papers (Dinda, 2004): Grossman and Krueger (1991), Shafik and Bandyopadhyay (1992) and Panayotou (1993). Literature reviews by Lapinskienė and Peleckis (2017), Stern (2004) and Dinda (2004) assert that previous EKC studies have failed to provide clear and inclusive findings on the inverted U-shaped relationship between the environment and economic growth. Moreover, Stern (2004) and Narayan and Narayan (2010) mentioned that most of the EKC literatures are based on weak econometric modeling.
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Modeling Energy Consumption, CO2 Emissions and Economic Growth Nexus in Ethiopia: Evidence from ARDL Approach to Cointegration and Causality Analysis

Modeling Energy Consumption, CO2 Emissions and Economic Growth Nexus in Ethiopia: Evidence from ARDL Approach to Cointegration and Causality Analysis

Alkhathlan & Javid, 2013; Jafari, Ismail, Othman, & Mawar, 2015; Baek & Kim, 2011). The first strand focuses on the relationships between economic growth and environmental pollutants: Farhani , Shahbaz , Sbia , and Chaibi (2014), Akpan and Abang (2015), Dinda and Coondoo (2006), Odhiambo (2011), Paresh and Narayan (2010), Kim , Lee , and Nam (2010), Kim and Baek (2011), Ghosh (2010) and others. These studies are closely related to testing the validity of the so-called environmental Kuznets curve (EKC) hypothesis which postulates an inverted U- shaped relationship between the level of environmental degradation and income growth. This is to mean that environmental degradation increases with per capita income during the early stages of economic growth, and then declines with per capita income after arriving at a threshold (Acaravci & Ozturk, 2010a). First set of empirical EKC studies appeared independently in three seminal working papers (Dinda, 2004): Grossman and Krueger (1991), Shafik and Bandyopadhyay (1992) and Panayotou (1993). The common point of these seminal works is the assertion that the environmental quality declines at the early stages of economic growth and subsequently improves at the later stages. Literature reviews by Lapinskienė and Peleckis (2017), Stern (2004) and Dinda (2004) assert that previous EKC studies have failed to provide clear and inclusive findings on the inverted U-shaped relationship between the environment and economic growth. Moreover, Stern (2004) and Narayan and Narayan (2010) noted that most of the EKC literatures are econometrically weak.
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Renewable Energy Consumption, Economic Growth and Co2 Emissions: Evidence from Selected Mena Countries

Renewable Energy Consumption, Economic Growth and Co2 Emissions: Evidence from Selected Mena Countries

By 2050, this demand is approximately projected to reach 2,900 TWh (Fichtner, 2011). But only recently, renewable resources across the region have been accorded priority. Governments of the MENA countries make efforts to use this potential in order to require additional technological improvements, cost reductions, and the adoption of favorable policy regimes. The use of renewable energy (hydro, wind, biomass, geothermal, and solar) seems the greatest solution to reduce the severity of the environmental problems, to ensure the improvement of social welfare, and to innovate the green technology of the industrials firm’s payoffs. The potential of the major renewable energy sources in the MENA Region is summarized below.
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Energy consumption, CO2 emissions and the economic growth nexus in Bangladesh: cointegration and dynamic causality analysis

Energy consumption, CO2 emissions and the economic growth nexus in Bangladesh: cointegration and dynamic causality analysis

Common and Barbier, 1996). Using Toda and Yamamoto (1995) approach, Soytas and Sari (2007) found that CO2 emissions granger cause energy consumption in Turkey but not vice- versa. So, whether continued increase in national income brings more degradation to the environmental quality is much critical for the design of development strategies for developing economies (Ang, 2007). The author found that CO2 emissions granger cause to the output which is conflicting to the EKC hypothesis. Elif et al., (2009) found that a monotonically increasing relationship between CO2 and income in Turkey. However, the empirical evidence remains controversial and ambiguous until to date and there is no agreement in the literature on the economic level at which environmental degradation starts declining (Dinda, 2004). We have chosen Bangladesh as a case study for some important reasons. First, the energy sector is not well organized (Mozumder and Marathe, 2007) in Bangladesh. It is suspected that economy grows with energy consumption grow. It is an energy deficit country. The major energy consists of natural gas (from which almost half of total is used for electricity production), petroleum and coal (BBS, 2005). The growth rate of economy is about 6% which is expecting (by policy makers) to rise over time. Since independence, the economy is growing moderately ranging from average economic growth 4 to 6 per cent per annum (BBS, 2005). The government makes strategic policies to increase the gross domestic product (GDP) growth at least by 2% more by 2015 (Six-five year plan, GOB, 2010). If GDP growth is associated with higher energy consumption and causality runs from energy to GDP, therefore, very often lack of smooth energy supply might be a serious constraint in the future to continue the same growth or to increase as planned. This can be true in the case of electricity consumption (when electricity consumption is used as a proxy for energy) in Bangladesh as well.
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Energy consumption, economic growth and CO2 emissions in Middle East and North African countries

Energy consumption, economic growth and CO2 emissions in Middle East and North African countries

Sari and Soytas (2009) investigate the relationship between carbon emissions, income, energy and total employment in five selected OPEC countries (including two MENA countries: Algeria and Saudi Arabia) for the period 1971–2002. They mainly focus on the link between energy use and income. Employing the autoregressive distributed lag (ARDL) approach, they find that there is a cointegrating relationship between the variables in Saudi Arabia and conclude that none of the countries needs to sacrifice economic growth to decrease their emission levels. Recently, Narayan et al. (2010) tested the Environment Kuznet’s Curve (EKC) hypothesis for 43 developing countries for the period from 1980 to 2004. They examined the EKC hypothesis based on the short- and long-run income elasticities vis-à-vis CO 2 emissions; that is, if the long-run income elasticity is smaller than the short-run income elasticity then it is evident for them that a country has reduced carbon dioxide emissions as its income has increased. They found that for the Middle Eastern panel, the income elasticity in the long run is smaller than the short run, implying that carbon dioxide emission has fallen with a rise in income. By using the same methodology Jaunky (2010) tested the EKC hypothesis for 36 high-income countries (including three MENA countries: Bahrain, Oman and UAE) over the period 1980-2005. Carbon dioxide emissions and GDP series are integrated of order one and cointegrated especially after controlling for cross-sectional dependence. Unidirectional causality running from real per capita GDP to per capita CO 2 emissions was uncovered in both the short run and long run. The empirical analysis based on individual countries suggests that for Oman (and for other 6 non MENA countries), as well as for the whole panel, CO 2 emissions have fallen as income rises in the long run. A 1% increase in GDP generates an increase of 0.68% in CO 2 emissions in the short run and 0.22% in the long run for the panel. These results do not provide evidence in favor of the EKC hypothesis but indicate that over time CO 2 emissions are stabilizing in rich countries.
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The Dynamic Linkage between CO2 emissions, Economic Growth, Renewable Energy Consumption, Number of Tourist Arrivals and Trade

The Dynamic Linkage between CO2 emissions, Economic Growth, Renewable Energy Consumption, Number of Tourist Arrivals and Trade

renewable energy consumption, international tourism and trade, the empirical analysis will first test the integration order of each variable. Panel unit root tests of the first-generation can lead to spurious results (because of size distortions) if significant degrees of positive residual cross-section dependence exist and are ignored. Consequently, the implementation of second- generation panel unit root tests is desirable only when it has been established that the panel is subject to a significant degree of residual cross-section dependence. In the cases where cross- section dependence is not sufficiently high, a loss of power might result if second-generation panel unit root tests that allow for cross-section dependence are employed. Therefore, before selecting the appropriate panel unit root test, it is crucial to provide some evidence on the degree of residual cross-section dependence.
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Energy Consumption, CO2 Emissions, and Economic Growth: A Moral Dilemma

Energy Consumption, CO2 Emissions, and Economic Growth: A Moral Dilemma

and this is true irrespective of the particular group of country under investigation. What is also true for all groups of countries is the fact that COALC is losing its importance as an energy source. This could be indicative of a recent trend in both developed and developing countries to produce oil and natural gas via the method of fracking as opposed to the emission-intensive source of coal (see, inter alia Howarth et al., 2011; Yang et al., 2012; Chen and Golley, 2014). A final issue that deserves mention is that focusing on the REC-growth nexus, IRFs indicate that REC does not instigate growth in any of the groups under investigation. Findings relating to REC are in line with Ocal and Aslan (2013) who report that there is negative impact of REC on economic growth. What is more, Ocal and Aslan (2013) provide evidence in support of the conservation hypothesis, while at the same time, they stress the fact that renewable energy is an expensive energy resource especially for developing countries. Re-iterating a point made in the previous section, these results pose a criticism of the inverted U-shaped EKC . To be more explicit, according to our results, countries cannot simply grow out of environmental pollution, as, apparently, the process of growth even at advanced stages of economic development inevitably entails the degradation of the physical environment.
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Nexus between Energy Consumption, Economic Development, and CO2 Emissions: Empirical Evidence from Morocco

Nexus between Energy Consumption, Economic Development, and CO2 Emissions: Empirical Evidence from Morocco

Existing literature that assesses the nexus between economic development, primary energy consumption, and CO2 emissions has been a point of interest for many scholars. Yet, there is no such existing literature that targets assessing such relationship for the case of Morocco. The following contribution determines the long run relationship between these variables using an autoregressive distributive lag model (ARDL) bound test that is developed by Pesaran et al. (2001). Findings indicate that there is a significant co-integration between the variables of interest, meaning that the long run relationship between them exists. Findings also show that energy consumption has direct positive effect on economic growth but it may have larger negative effect on economic growth indirectly through higher carbon dioxide emissions.
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Revisiting the relationships between non renewable energy consumption, CO2 emissions and economic growth in Iran

Revisiting the relationships between non renewable energy consumption, CO2 emissions and economic growth in Iran

2009; Pao & Fu 2013; Tugcu et al. 2012; Long et al. 2015; Shafiei & Salim 2014; Florez-Orrego et al. 2014; Farhani & Shahbaz 2014; Ben Jebli & Ben Youssef 2015; Shabbir et al. 2014). The golden result of most of these studies proves the significant role of renewable energy consumption in the CO2 mitigation in various countries. Eventhough, some studies (e.g. Seker and Cetin, 2015) failed to find any evidence of short or long-run relationship between consumption of different energy resources- economic growth or consumption of different energy resources- CO 2 emissions.
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Renewable Energy and Nonrenewable Energy Consumption, Co2 Emissions and Economic Expansion Nexus: Further Evidence from Kenya

Renewable Energy and Nonrenewable Energy Consumption, Co2 Emissions and Economic Expansion Nexus: Further Evidence from Kenya

Energy production and consumption, energy density, the status and price of energy all play a critical role in the development trend of CO2 emission. In this sense, it acts as an engine of economic growth and development. Therefore, a country with heavy utilization of energy is thought to also have a high life standard. However, high energy use causes high carbon emission which has a reverse effect on the environment and economic activities (Alkhathlan and Javid, 2012). The constantly rising amount of CO2 and its repression on the greenhouse effect shows the gravity of this problem. Scholars and policy-makers have a consensus on the necessity of reducing the emission of greenhouse gas to mitigate global warming (Zhang and Cheng, 2009). Emission of pollution factors tend to increase with the expansion of economic activities. On the other hand, clean technologies generate less pollution per unit and members of society can focus their demands on a healthier and more sustainable environment. In this case, the country can resort to implementing more strict environmental controls (Grossman and Krueger, 1991). According to EKC hypothesis, the connection between income per capita and pollutant emissions per capita is in the shape of an inverted-U curve. It shows that economic activities may benefit environmental quality after a certain point (Niu and Li, 2014). Therefore, environmental harm is inevitable at the first stages of economic growth and for this reason countries are obliged to endure it until the reversing effect (Figure 1) (Shahrin and Halim, 2007).
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Economic Growth, Energy Consumption, Financial Development, International Trade and CO2 Emissions in Indonesia

Economic Growth, Energy Consumption, Financial Development, International Trade and CO2 Emissions in Indonesia

order of integration of the series. This requires that the variables should be integrated at I(0) or I(1) or I(0)/I(1). The computation of the ARDL F-statistic becomes useless if none of the variables is stationary at I(2) or beyond that order of integration. In doing so, we have applied Zivot-Andrews structural break trended unit root test to ensure that all the variables are integrated at I(0) or I(1) or I(0)/I(1) 5 . The results of Zivot-Andrews [107]) structural break trended unit root test are reported in Table-1. Our empirical evidence discloses that all the series show unit root problem at their level but found to be integrated at I(1). This entails that the series is stationary in their first differenced form. So, unique level of the variables leads us to examine the existence of a long run relationship between economic growth, energy consumption, financial development, trade openness and CO 2 emissions by applying the ARDL bounds testing approach
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CO2 Emissions, Energy Consumption and Economic Growth

CO2 Emissions, Energy Consumption and Economic Growth

Trade openness has a statistically negative impact on CO 2 emissions for Australia, Japan, Mexico, Peru, and Vietnam, but a positive effect for Malaysia and New Zealand. The evidence for Canada and Chile is inconclusive. An interesting implication is that, based on the specific country characteristics, trade expansion could be more harmful than beneficial for the environment. As such, different countries should encourage the implementation of an appropriate strategy and policy in favour of trading environmentally-friendly products in order to gain the benefits from the establishment of the CPTPP, as well as to minimize the negative impacts on the environment of conducting international trade.
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Multivariate granger causality between CO2 Emissions, energy intensity, financial development and economic growth: evidence from Portugal

Multivariate granger causality between CO2 Emissions, energy intensity, financial development and economic growth: evidence from Portugal

In recent studies, Payne [4] and Ozturk [5] reviewed the existing literature between energy consumption and economic growth nexus and provided four empirical competing hypotheses for said issue. Such as; (i) growth hypothesis i.e. energy consumption Granger causes economic growth implies that energy reduction policies should be discouraged and new sources of energy must be explored, (ii) if causality is found running from economic growth to energy consumption, then energy reduction policies would not have adverse affect on economic growth because economic growth of the country does not seem to be dependent on energy, (iii) feedback hypothesis implies the interdependence of energy consumption and economic growth. A rise in economic growth leads to increase in energy demand, which in return stimulates economic growth. In such a situation, energy conservation policies are detrimental for economic growth and (iv) no causality between energy consumption and economic growth infers neutrality hypothesis indicating that energy and growth are not interdependent. The adoption of conservation and exploration of energy policies will not favorable affect the economic growth.
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Energy Consumption, CO2 Emissions, and Economic Growth: A Moral Dilemma

Energy Consumption, CO2 Emissions, and Economic Growth: A Moral Dilemma

In this study we examine the dynamic interrelationship in the output–energy– environment nexus by applying panel vector autoregression (PVAR) and impulse response function analyses to data on energy consumption (and its subcomponents), carbon dioxide emissions and real GDP in 106 countries classified by different income groups over the period 1971–2011. Our results reveal that the effects of the various types of energy consumption on economic growth and emissions are heterogeneous on the various groups of countries. Moreover, causality between total economic growth and energy consumption is bidirectional, thus making a case for the feed- back hypothesis. However, we cannot report any statistically significant evidence that renewable energy consumption, in particular, is conducive to economic growth, a fact that weakens the argument that renewable energy consumption is able to promote growth in a more efficient and environmentally sustainable way. Finally, in analysing the case for an inverted U-shaped EKC, we find that the continued process of growth aggravates the greenhouse gas emissions phenomenon. In this regard, we cannot provide any evidence that developed countries may actually grow-out of envi- ronmental pollution. In the light of these findings, the efficacy of recent government policies in various countries to promote renewable energy consumption as a means for sustainable growth is questioned. Put differently, there seems to be an ethical dilemma, between high economic growth rates and unsustainable environment and low or zero economic growth and environmental sustainability.
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Energy Consumption, Economic Growth and CO2 Emissions in Middle East and North African Countries

Energy Consumption, Economic Growth and CO2 Emissions in Middle East and North African Countries

This article extends the recent findings of Liu (2005), Ang (2007), Apergis et al. (2009) and Payne (2010) by implementing recent bootstrap panel unit root tests and cointegration techniques to investigate the relationship between carbon dioxide emissions, energy consumption, and real GDP for 12 Middle East and North African Countries (MENA) over the period 1981–2005. Our results show that in the long-run energy consumption has a positive significant impact on CO2 emissions. More interestingly, we show that real GDP exhibits a quadratic relationship with CO2 emissions for the region as a whole. However, although the estimated long-run coefficients of income and its square satisfy the EKC hypothesis in most studied countries, the turning points are very low in some cases and very high in other cases, hence providing poor evidence in support of the EKC hypothesis. Thus, our findings suggest that not all MENA countries need to sacrifice economic growth to decrease their emission levels as they may achieve CO2 emissions reduction via energy conservation without negative long-run effects on economic growth.
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Financial Development, Energy Consumption and CO2 Emissions: Evidence from ARDL Approach for Pakistan

Financial Development, Energy Consumption and CO2 Emissions: Evidence from ARDL Approach for Pakistan

The results of error correction model, reported in Table-5, reveal that economic growth is linked positively with energy emissions. We find 0.68 percent rise in energy emissions from a 1 percent increase in economic growth, on average, ceteris paribus, but the long run results are more reassuring. A1 percent increase in financial development is causes 0.026 percent reduction in energy emissions. The results suggest that the average energy emissions rise by 0.97 percent from a 1 percent increase in energy use. The impact of population on energy emissions is negative but insignificant. The sign of coefficient of lagged ECM term is negative and significant at the 1% level. This establishes long run relation among the running variables. The value of lagged ECM term, -0.1066 suggests that changes in energy emissions from short run to long span of time is corrected by 10.66 percent each year in Pakistan.
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