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A Note on Oil Consumption and Growth: The Role of Greenhouse Gases Emissions

Author

Listed:
  • Sarah Nandnaba

    (Department of Economics, Ecole normale superieure (ENS) Paris-Saclay, 91190 Gif-sur-Yvette, France.)

  • Abebe Hailemariam

    (Bankwest Curtin Economics Centre, Faculty of Business and law, Curtin University Perth, 6102, Australia)

  • Rangan Gupta

    (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa)

  • Xin Sheng

    (Lord Ashcroft International Business School, Anglia Ruskin University, Chelmsford, United Kingdom.)

Abstract

The paper empirically examines the role of Greenhouse Gases (GHGs) emissions on the oil consumption-growth nexus of sixteen OECD countries. Using a nonlinear local projection approach and a long historical dataset from 1890 to 2022, we find that the impact of oil consumption on economic growth is conditional on the categorization of the countries based on the level of GHGs emissions. More specifically, we find that economies under the high-emission category face a slowdown in growth, while those in low-emission group can benefit from a positive shock in oil consumption, especially in the post World War II era. The results have important policy implications for sustainable growth.

Suggested Citation

  • Sarah Nandnaba & Abebe Hailemariam & Rangan Gupta & Xin Sheng, 2024. "A Note on Oil Consumption and Growth: The Role of Greenhouse Gases Emissions," Working Papers 202417, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:202417
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    File URL: http://www.up.ac.za/media/shared/61/WP/wp_2024_17.zp249955.pdf
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    More about this item

    Keywords

    Oil consumption; economic growth; sustainability; climate change; greenhouse gases emissions; nonlinear local projection;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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