IDEAS home Printed from https://ideas.repec.org/a/spr/eurase/v6y2016i1d10.1007_s40822-015-0037-2.html
   My bibliography  Save this article

CO2 emissions and human development in OECD countries: granger causality analysis with a panel data approach

Author

Listed:
  • Serap Bedir

    (Erzurum Technical University)

  • Vildan Merve Yilmaz

    (Erzurum Technical University)

Abstract

Carbon dioxide (CO2) is a major greenhouse gas emitted through human activities resulting from energy use. This study examines the causal relation between the logarithms of the human development index and CO2 emissions in 33 Organization for Economic Co-operation and Development countries for 1992–2011. Moreover, it applies a new panel data approach developed by Konya (2006). This approach is based on the seemingly unrelated regression system and Wald tests with country-specific bootstrap critical values. The results obtained from the Granger causality analysis support the growth hypothesis for Denmark, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Poland, Spain, Slovakia, Turkey, and the U.S. In addition, they support the conservation hypothesis for Chile, Czech Republic, Estonia, Finland, France, Greece, New Zealand, and Mexico. The feedback hypothesis is observed for Iceland, Norway, Portugal, and Switzerland as well as the neutrality hypothesis of the other countries (Australia, Austria, Belgium, Canada, Hungary, Netherlands, Slovenia, Sweden, and the UK). This implies that conservation policies that are related to coal, gas, electricity, and oil consumption can reduce CO2 emissions but may simultaneously hinder economic growth and human living standards. However, if conservation policies are not implemented, the detrimental effects of environmental degradation could also affect human living standards. Therefore, policymakers must develop strategic plans to reduce carbon emissions that do not negatively impact their constituents. One possible way to achieve this is by increasing the efficiency of energy use.

Suggested Citation

  • Serap Bedir & Vildan Merve Yilmaz, 2016. "CO2 emissions and human development in OECD countries: granger causality analysis with a panel data approach," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 6(1), pages 97-110, April.
    • Handle: RePEc:spr:eurase:v:6:y:2016:i:1:d:10.1007_s40822-015-0037-2
    DOI: 10.1007/s40822-015-0037-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40822-015-0037-2
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s40822-015-0037-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Wolde-Rufael, Yemane, 2009. "Energy consumption and economic growth: The experience of African countries revisited," Energy Economics, Elsevier, vol. 31(2), pages 217-224.
    2. Steinberger, Julia K. & Roberts, J. Timmons, 2010. "From constraint to sufficiency: The decoupling of energy and carbon from human needs, 1975-2005," Ecological Economics, Elsevier, vol. 70(2), pages 425-433, December.
    3. Mehrara, Mohsen, 2007. "Energy consumption and economic growth: The case of oil exporting countries," Energy Policy, Elsevier, vol. 35(5), pages 2939-2945, May.
    4. Shahbaz, Muhammad & Lean, Hooi Hooi, 2012. "The dynamics of electricity consumption and economic growth: A revisit study of their causality in Pakistan," Energy, Elsevier, vol. 39(1), pages 146-153.
    5. Dumitrescu, Elena-Ivona & Hurlin, Christophe, 2012. "Testing for Granger non-causality in heterogeneous panels," Economic Modelling, Elsevier, vol. 29(4), pages 1450-1460.
    6. Hsueh, Shun-Jen & Hu, Yu-Hau & Tu, Chien-Heng, 2013. "Economic growth and financial development in Asian countries: A bootstrap panel Granger causality analysis," Economic Modelling, Elsevier, vol. 32(C), pages 294-301.
    7. T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 239-253.
    8. Apergis, Nicholas & Payne, James E., 2010. "The emissions, energy consumption, and growth nexus: Evidence from the commonwealth of independent states," Energy Policy, Elsevier, vol. 38(1), pages 650-655, January.
    9. Cowan, Wendy N. & Chang, Tsangyao & Inglesi-Lotz, Roula & Gupta, Rangan, 2014. "The nexus of electricity consumption, economic growth and CO2 emissions in the BRICS countries," Energy Policy, Elsevier, vol. 66(C), pages 359-368.
    10. M. Hashem Pesaran, 2021. "General diagnostic tests for cross-sectional dependence in panels," Empirical Economics, Springer, vol. 60(1), pages 13-50, January.
    11. Apergis, Nicholas & Payne, James E., 2009. "Energy consumption and economic growth: Evidence from the Commonwealth of Independent States," Energy Economics, Elsevier, vol. 31(5), pages 641-647, September.
    12. Hashem Pesaran, M. & Yamagata, Takashi, 2008. "Testing slope homogeneity in large panels," Journal of Econometrics, Elsevier, vol. 142(1), pages 50-93, January.
    13. Kar, Muhsin & NazlIoglu, Saban & AgIr, Hüseyin, 2011. "Financial development and economic growth nexus in the MENA countries: Bootstrap panel granger causality analysis," Economic Modelling, Elsevier, vol. 28(1-2), pages 685-693, January.
    14. Kim, Sei-wan & Lee, Kihoon & Nam, Kiseok, 2010. "The relationship between CO2 emissions and economic growth: The case of Korea with nonlinear evidence," Energy Policy, Elsevier, vol. 38(10), pages 5938-5946, October.
    15. Saboori, Behnaz & Sulaiman, Jamalludin, 2013. "Environmental degradation, economic growth and energy consumption: Evidence of the environmental Kuznets curve in Malaysia," Energy Policy, Elsevier, vol. 60(C), pages 892-905.
    16. Lee, Chien-Chiang, 2005. "Energy consumption and GDP in developing countries: A cointegrated panel analysis," Energy Economics, Elsevier, vol. 27(3), pages 415-427, May.
    17. Konya, Laszlo, 2006. "Exports and growth: Granger causality analysis on OECD countries with a panel data approach," Economic Modelling, Elsevier, vol. 23(6), pages 978-992, December.
    18. Marti­nez, Daniel M. & Ebenhack, Ben W., 2008. "Understanding the role of energy consumption in human development through the use of saturation phenomena," Energy Policy, Elsevier, vol. 36(4), pages 1430-1435, April.
    19. Ozcan, Burcu, 2013. "The nexus between carbon emissions, energy consumption and economic growth in Middle East countries: A panel data analysis," Energy Policy, Elsevier, vol. 62(C), pages 1138-1147.
    20. M. Hashem Pesaran, 2006. "Estimation and Inference in Large Heterogeneous Panels with a Multifactor Error Structure," Econometrica, Econometric Society, vol. 74(4), pages 967-1012, July.
    21. Jahangir Alam, Mohammad & Ara Begum, Ismat & Buysse, Jeroen & Van Huylenbroeck, Guido, 2012. "Energy consumption, carbon emissions and economic growth nexus in Bangladesh: Cointegration and dynamic causality analysis," Energy Policy, Elsevier, vol. 45(C), pages 217-225.
    22. Apergis, Nicholas & Payne, James E., 2011. "A dynamic panel study of economic development and the electricity consumption-growth nexus," Energy Economics, Elsevier, vol. 33(5), pages 770-781, September.
    23. Chaido Dritsaki & Melina Dritsaki, 2014. "Causal Relationship between Energy Consumption, Economic Growth and CO2 Emissions: A Dynamic Panel Data Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 4(2), pages 125-136.
    24. Soytas, Ugur & Sari, Ramazan, 2009. "Energy consumption, economic growth, and carbon emissions: Challenges faced by an EU candidate member," Ecological Economics, Elsevier, vol. 68(6), pages 1667-1675, April.
    25. Nazlioglu, Saban & Lebe, Fuat & Kayhan, Selim, 2011. "Nuclear energy consumption and economic growth in OECD countries: Cross-sectionally dependent heterogeneous panel causality analysis," Energy Policy, Elsevier, vol. 39(10), pages 6615-6621, October.
    26. Ouedraogo, Nadia S., 2013. "Energy consumption and human development: Evidence from a panel cointegration and error correction model," Energy, Elsevier, vol. 63(C), pages 28-41.
    27. Narayan, Paresh Kumar & Smyth, Russell, 2009. "Multivariate granger causality between electricity consumption, exports and GDP: Evidence from a panel of Middle Eastern countries," Energy Policy, Elsevier, vol. 37(1), pages 229-236, January.
    28. Wang, S.S. & Zhou, D.Q. & Zhou, P. & Wang, Q.W., 2011. "CO2 emissions, energy consumption and economic growth in China: A panel data analysis," Energy Policy, Elsevier, vol. 39(9), pages 4870-4875, September.
    29. Alkhathlan, Khalid & Javid, Muhammad, 2013. "Energy consumption, carbon emissions and economic growth in Saudi Arabia: An aggregate and disaggregate analysis," Energy Policy, Elsevier, vol. 62(C), pages 1525-1532.
    30. Soytas, Ugur & Sari, Ramazan & Ewing, Bradley T., 2007. "Energy consumption, income, and carbon emissions in the United States," Ecological Economics, Elsevier, vol. 62(3-4), pages 482-489, May.
    31. Niu, Shuwen & Ding, Yongxia & Niu, Yunzhu & Li, Yixin & Luo, Guanghua, 2011. "Economic growth, energy conservation and emissions reduction: A comparative analysis based on panel data for 8 Asian-Pacific countries," Energy Policy, Elsevier, vol. 39(4), pages 2121-2131, April.
    32. Acaravci, Ali & Ozturk, Ilhan, 2010. "Electricity consumption-growth nexus: Evidence from panel data for transition countries," Energy Economics, Elsevier, vol. 32(3), pages 604-608, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sabyasachi Tripathi, 2021. "How does urbanization affect the human development index? A cross-country analysis," Asia-Pacific Journal of Regional Science, Springer, vol. 5(3), pages 1053-1080, October.
    2. Islam, Md. Monirul & Sohag, Kazi & Alam, Md. Mahmudul, 2022. "Mineral import demand and clean energy transitions in the top mineral-importing countries," Resources Policy, Elsevier, vol. 78(C).
    3. Hashemizadeh, Ali & Bui, Quocviet & Zaidi, Syed Anees Haider, 2022. "A blend of renewable and nonrenewable energy consumption in G-7 countries: The role of disaggregate energy in human development," Energy, Elsevier, vol. 241(C).
    4. Maciej Dzikuć & Joanna Wyrobek & Łukasz Popławski, 2021. "Economic Determinants of Low-Carbon Development in the Visegrad Group Countries," Energies, MDPI, vol. 14(13), pages 1-12, June.
    5. Betul Can & Zahoor Ahmed & Mahmood Ahmad & Muhlis Can, 2022. "Do renewable energy consumption and green trade openness matter for human well-being? Empirical evidence from European Union countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(3), pages 1043-1059, December.
    6. Esmeralda Villegas Pocaterra & Leobaldo Enrique Molero Oliva & Virginia Elizabeth Rodríguez López & Tanya Shyrna Andino Chancay, 2022. "Los efectos del IDH sobre las emisiones de CO2 en América Latina y el Caribe," Apuntes del Cenes, Universidad Pedagógica y Tecnológica de Colombia, vol. 41(74), pages 141-175, July.
    7. Aqib, Muhammad & Zaman, Khalid, 2023. "Greening the Workforce: The Power of Investing in Human Capital," MPRA Paper 116263, University Library of Munich, Germany, revised 05 Feb 2023.
    8. Adekoya, Oluwasegun B. & Olabode, Joshua K. & Rafi, Syed K., 2021. "Renewable energy consumption, carbon emissions and human development: Empirical comparison of the trajectories of world regions," Renewable Energy, Elsevier, vol. 179(C), pages 1836-1848.
    9. Christos Kollias & Stephanos Papadamou, 2019. "Peace And Tourism: A Nexus? Evidence From Developed And Developing Countries," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(02), pages 323-339, March.
    10. Tran, Nguyen Van & Tran, Quyet Van & Do, Linh Thi Thuy & Dinh, Linh Hong & Do, Ha Thi Thu, 2019. "Trade off between environment, energy consumption and human development: Do levels of economic development matter?," Energy, Elsevier, vol. 173(C), pages 483-493.
    11. Amine Lahiani & Sinha Avik & Muhammad Shahbaz, 2018. "Renewable energy consumption, income, CO2 emissions and oil prices in G7 countries: The importance of asymmetries," Post-Print hal-03677233, HAL.
    12. Islam, Md. Monirul & Sohag, Kazi & Hammoudeh, Shawkat & Mariev, Oleg & Samargandi, Nahla, 2022. "Minerals import demands and clean energy transitions: A disaggregated analysis," Energy Economics, Elsevier, vol. 113(C).
    13. Suzanna Elmassah & Eslam A. Hassanein, 2022. "Can the Resource Curse for Well-Being Be Morphed into a Blessing? Investigating the Moderating Role of Environmental Quality, Governance, and Human Capital," Sustainability, MDPI, vol. 14(22), pages 1-21, November.
    14. Opoku, Eric Evans Osei & Dogah, Kingsley E. & Aluko, Olufemi Adewale, 2022. "The contribution of human development towards environmental sustainability," Energy Economics, Elsevier, vol. 106(C).
    15. Wang, Zhaohua & Bui, Quocviet & Zhang, Bin, 2020. "The relationship between biomass energy consumption and human development: Empirical evidence from BRICS countries," Energy, Elsevier, vol. 194(C).
    16. Anan Wattanakuljarus, 2019. "Effects and burdens of a carbon tax scheme in Thailand," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 9(2), pages 173-219, June.
    17. Mihaela Sterpu & Georgeta Soava & Anca Mehedintu, 2018. "Impact of Economic Growth and Energy Consumption on Greenhouse Gas Emissions: Testing Environmental Curves Hypotheses on EU Countries," Sustainability, MDPI, vol. 10(9), pages 1-14, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tiba, Sofien & Omri, Anis, 2017. "Literature survey on the relationships between energy, environment and economic growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 1129-1146.
    2. Sofien, Tiba & Omri, Anis, 2016. "Literature survey on the relationships between energy variables, environment and economic growth," MPRA Paper 82555, University Library of Munich, Germany, revised 14 Sep 2016.
    3. Wolde-Rufael, Yemane, 2014. "Electricity consumption and economic growth in transition countries: A revisit using bootstrap panel Granger causality analysis," Energy Economics, Elsevier, vol. 44(C), pages 325-330.
    4. Buhari DOĞAN & Osman DEĞER, 2018. "The role of economic growth and energy consumption on CO2 emissions in E7 countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(615), S), pages 231-246, Summer.
    5. Sun, Huaping & Samuel, Clottey Attuquaye & Kofi Amissah, Joshua Clifford & Taghizadeh-Hesary, Farhad & Mensah, Isaac Adjei, 2020. "Non-linear nexus between CO2 emissions and economic growth: A comparison of OECD and B&R countries," Energy, Elsevier, vol. 212(C).
    6. Salahuddin, Mohammad & Gow, Jeff, 2014. "Economic growth, energy consumption and CO2 emissions in Gulf Cooperation Council countries," Energy, Elsevier, vol. 73(C), pages 44-58.
    7. Habib Ur Rahman & Umer Zaman & Jarosław Górecki, 2021. "The Role of Energy Consumption, Economic Growth and Globalization in Environmental Degradation: Empirical Evidence from the BRICS Region," Sustainability, MDPI, vol. 13(4), pages 1-16, February.
    8. Ozcan, Burcu, 2013. "The nexus between carbon emissions, energy consumption and economic growth in Middle East countries: A panel data analysis," Energy Policy, Elsevier, vol. 62(C), pages 1138-1147.
    9. Mahmut Zortuk & Semih Karacan, 2018. "Energy–growth nexus revisited: an empirical application on transition countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 20(2), pages 605-623, April.
    10. Fang, Yiping, 2011. "Economic welfare impacts from renewable energy consumption: The China experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 5120-5128.
    11. Dakpogan, Arnaud & Smit, Eon, 2018. "The effect of electricity losses on GDP in Benin," MPRA Paper 89545, University Library of Munich, Germany.
    12. Hamit-Haggar, Mahamat, 2012. "Greenhouse gas emissions, energy consumption and economic growth: A panel cointegration analysis from Canadian industrial sector perspective," Energy Economics, Elsevier, vol. 34(1), pages 358-364.
    13. Cowan, Wendy N. & Chang, Tsangyao & Inglesi-Lotz, Roula & Gupta, Rangan, 2014. "The nexus of electricity consumption, economic growth and CO2 emissions in the BRICS countries," Energy Policy, Elsevier, vol. 66(C), pages 359-368.
    14. Yusuf Ekrem AKBAS, 2015. "Financial development and economic growth in emerging market: bootstrap panel causality analysis," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(604), A), pages 171-186, Autumn.
    15. Dobnik, Frauke, 2011. "Energy Consumption and Economic Growth Revisited: Structural Breaks and Cross-section Dependence," Ruhr Economic Papers 303, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    16. Muhammad Bilal Khan & Hummera Saleem & Malik Shahzad Shabbir & Xie Huobao, 2022. "The effects of globalization, energy consumption and economic growth on carbon dioxide emissions in South Asian countries," Energy & Environment, , vol. 33(1), pages 107-134, February.
    17. Lean, Hooi Hooi & Smyth, Russell, 2010. "CO2 emissions, electricity consumption and output in ASEAN," Applied Energy, Elsevier, vol. 87(6), pages 1858-1864, June.
    18. Al-mulali, Usama & Tang, Chor Foon & Ozturk, Ilhan, 2015. "Estimating the Environment Kuznets Curve hypothesis: Evidence from Latin America and the Caribbean countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 918-924.
    19. Misbah Sadiq & Desti Kannaiah & Ghulam Yahya Khan & Malik Shahzad Shabbir & Kanwal Bilal & Aysha Zamir, 2023. "Does sustainable environmental agenda matter? The role of globalization toward energy consumption, economic growth, and carbon dioxide emissions in South Asian countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(1), pages 76-95, January.
    20. Hasanov, Fakhri & Bulut, Cihan & Suleymanov, Elchin, 2017. "Review of energy-growth nexus: A panel analysis for ten Eurasian oil exporting countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 369-386.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:eurase:v:6:y:2016:i:1:d:10.1007_s40822-015-0037-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.