IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v86y2009i10p1887-1893.html
   My bibliography  Save this article

Are global warming and economic growth compatible? Evidence from five OPEC countries?

Author

Listed:
  • Sari, Ramazan
  • Soytas, Ugur

Abstract

In this paper, we investigate the relationship between carbon emissions, income, energy and total employment in selected OPEC countries for the period of 1971-2002. We mainly focus on the link between energy use and income. Employing the autoregressive distributed lag (ARDL) approach, we find that there is a cointegrating relationship between the variables in Saudi Arabia only. The long run forcing variables for income are determined to be employment and energy for Saudi Arabia. In Indonesia, Algeria, Nigeria, and Venezuela, there is no cointegration between income and energy. Secondly we question the long run Granger causality between carbon emissions, energy use, and income. Our results suggest that none of the countries need to sacrifice economic growth to decrease their emission levels. Indonesia and Nigeria may contribute to emissions reduction via energy conservation without negative long run effects on economic growth.

Suggested Citation

  • Sari, Ramazan & Soytas, Ugur, 2009. "Are global warming and economic growth compatible? Evidence from five OPEC countries?," Applied Energy, Elsevier, vol. 86(10), pages 1887-1893, October.
    • Handle: RePEc:eee:appene:v:86:y:2009:i:10:p:1887-1893
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306-2619(08)00326-7
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    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. Mehrara, Mohsen, 2007. "Energy consumption and economic growth: The case of oil exporting countries," Energy Policy, Elsevier, vol. 35(5), pages 2939-2945, May.
    2. Zamani, Mehrzad, 2007. "Energy consumption and economic activities in Iran," Energy Economics, Elsevier, vol. 29(6), pages 1135-1140, November.
    3. Hondroyiannis, George & Lolos, Sarantis & Papapetrou, Evangelia, 2002. "Energy consumption and economic growth: assessing the evidence from Greece," Energy Economics, Elsevier, vol. 24(4), pages 319-336, July.
    4. Asafu-Adjaye, John, 2000. "The relationship between energy consumption, energy prices and economic growth: time series evidence from Asian developing countries," Energy Economics, Elsevier, vol. 22(6), pages 615-625, December.
    5. Sari, Ramazan & Soytas, Ugur, 2004. "Disaggregate energy consumption, employment and income in Turkey," Energy Economics, Elsevier, vol. 26(3), pages 335-344, May.
    6. Ghali, Khalifa H. & El-Sakka, M. I. T., 2004. "Energy use and output growth in Canada: a multivariate cointegration analysis," Energy Economics, Elsevier, vol. 26(2), pages 225-238, March.
    7. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    8. Brian R. Copeland & M. Scott Taylor, 2004. "Trade, Growth, and the Environment," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 7-71, March.
    9. Elliott, Graham & Rothenberg, Thomas J & Stock, James H, 1996. "Efficient Tests for an Autoregressive Unit Root," Econometrica, Econometric Society, vol. 64(4), pages 813-836, July.
    10. 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.
    11. Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
    12. James Laurenceson & Joseph C.H. Chai, 2003. "Financial Reform and Economic Development in China," Books, Edward Elgar Publishing, number 2714.
    13. Dinda, Soumyananda & Coondoo, Dipankor, 2006. "Income and emission: A panel data-based cointegration analysis," Ecological Economics, Elsevier, vol. 57(2), pages 167-181, May.
    14. Subrata Ghatak & Jalal Siddiki, 2001. "The use of the ARDL approach in estimating virtual exchange rates in India," Journal of Applied Statistics, Taylor & Francis Journals, vol. 28(5), pages 573-583.
    15. Stern, David I., 1993. "Energy and economic growth in the USA : A multivariate approach," Energy Economics, Elsevier, vol. 15(2), pages 137-150, April.
    16. Paresh Kumar Narayan, 2005. "The saving and investment nexus for China: evidence from cointegration tests," Applied Economics, Taylor & Francis Journals, vol. 37(17), pages 1979-1990.
    17. Soytas, Ugur & Sari, Ramazan, 2006. "Energy consumption and income in G-7 countries," Journal of Policy Modeling, Elsevier, vol. 28(7), pages 739-750, October.
    18. Glasure, Yong U., 2002. "Energy and national income in Korea: further evidence on the role of omitted variables," Energy Economics, Elsevier, vol. 24(4), pages 355-365, July.
    19. Robert J. Hill & Elisabetta Magnani, 2002. "An Exploration of the Conceptual and Empirical Basis of the Environmental Kuznets Curve," Australian Economic Papers, Wiley Blackwell, vol. 41(2), pages 239-254, June.
    20. Al-Iriani, Mahmoud A., 2006. "Energy-GDP relationship revisited: An example from GCC countries using panel causality," Energy Policy, Elsevier, vol. 34(17), pages 3342-3350, November.
    21. Zapata, Hector O & Rambaldi, Alicia N, 1997. "Monte Carlo Evidence on Cointegration and Causation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(2), pages 285-298, May.
    22. Stern, David I., 2004. "The Rise and Fall of the Environmental Kuznets Curve," World Development, Elsevier, vol. 32(8), pages 1419-1439, August.
    23. Wolde-Rufael, Yemane, 2005. "Energy demand and economic growth: The African experience," Journal of Policy Modeling, Elsevier, vol. 27(8), pages 891-903, November.
    24. Ewing, Bradley T. & Sari, Ramazan & Soytas, Ugur, 2007. "Disaggregate energy consumption and industrial output in the United States," Energy Policy, Elsevier, vol. 35(2), pages 1274-1281, February.
    25. Lee, Chien-Chiang & Chang, Chun-Ping, 2008. "Energy consumption and economic growth in Asian economies: A more comprehensive analysis using panel data," Resource and Energy Economics, Elsevier, vol. 30(1), pages 50-65, January.
    26. Soytas, Ugur & Sari, Ramazan, 2003. "Energy consumption and GDP: causality relationship in G-7 countries and emerging markets," Energy Economics, Elsevier, vol. 25(1), pages 33-37, January.
    27. Huang, Bwo-Nung & Hwang, M.J. & Yang, C.W., 2008. "Does more energy consumption bolster economic growth An application of the nonlinear threshold regression model," Energy Policy, Elsevier, vol. 36(2), pages 755-767, February.
    28. Lee, Chien-Chiang, 2006. "The causality relationship between energy consumption and GDP in G-11 countries revisited," Energy Policy, Elsevier, vol. 34(9), pages 1086-1093, June.
    29. Soytas, Ugur & Sari, Ramazan, 2007. "The relationship between energy and production: Evidence from Turkish manufacturing industry," Energy Economics, Elsevier, vol. 29(6), pages 1151-1165, November.
    30. Hill, Robert J & Magnani, Elisabetta, 2002. "An Exploration of the Conceptual and Empirical Basis of the Environmental Kuznets Curve," Australian Economic Papers, Wiley Blackwell, vol. 41(2), pages 239-254, June.
    31. Abul Masih & Rumi Masih, 1998. "A multivariate cointegrated modelling approach in testing temporal causality between energy consumption, real income and prices with an application to two Asian LDCs," Applied Economics, Taylor & Francis Journals, vol. 30(10), pages 1287-1298.
    32. Masih, Abul M. M. & Masih, Rumi, 1997. "On the temporal causal relationship between energy consumption, real income, and prices: Some new evidence from Asian-energy dependent NICs Based on a multivariate cointegration/vector error-correctio," Journal of Policy Modeling, Elsevier, vol. 19(4), pages 417-440, August.
    33. Serena Ng & Pierre Perron, 2001. "LAG Length Selection and the Construction of Unit Root Tests with Good Size and Power," Econometrica, Econometric Society, vol. 69(6), pages 1519-1554, November.
    34. Sari, Ramazan & Soytas, Ugur, 2007. "The growth of income and energy consumption in six developing countries," Energy Policy, Elsevier, vol. 35(2), pages 889-898, February.
    35. Masih, Abul M. M. & Masih, Rumi, 1996. "Energy consumption, real income and temporal causality: results from a multi-country study based on cointegration and error-correction modelling techniques," Energy Economics, Elsevier, vol. 18(3), pages 165-183, July.
    36. Narayan, Paresh Kumar & Smyth, Russell, 2005. "Electricity consumption, employment and real income in Australia evidence from multivariate Granger causality tests," Energy Policy, Elsevier, vol. 33(9), pages 1109-1116, June.
    37. Coondoo, Dipankor & Dinda, Soumyananda, 2002. "Causality between income and emission: a country group-specific econometric analysis," Ecological Economics, Elsevier, vol. 40(3), pages 351-367, March.
    38. Dinda, Soumyananda, 2004. "Environmental Kuznets Curve Hypothesis: A Survey," Ecological Economics, Elsevier, vol. 49(4), pages 431-455, August.
    39. Squalli, Jay, 2007. "Electricity consumption and economic growth: Bounds and causality analyses of OPEC members," Energy Economics, Elsevier, vol. 29(6), pages 1192-1205, November.
    Full references (including those not matched with items on IDEAS)

    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. 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.
    2. Ozturk, Ilhan, 2010. "A literature survey on energy-growth nexus," Energy Policy, Elsevier, vol. 38(1), pages 340-349, January.
    3. 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.
    4. 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.
    5. Farzana Sharmin & Mohammed Robayet Khan & Mohammed Robayet Khan, 2016. "A Causal Relationship between Energy Consumption, Energy Prices and Economic Growth in Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 6(3), pages 477-494.
    6. Magazzino, Cosimo, 2011. "Energy consumption and aggregate income in Italy: cointegration and causality analysis," MPRA Paper 28494, University Library of Munich, Germany.
    7. Ewing, Bradley T. & Payne, James E. & Caporin, Massimilano, 2022. "The Asymmetric Impact of Oil Prices and Production on Drilling Rig Trajectory: A correction," Resources Policy, Elsevier, vol. 79(C).
    8. Patrick Withey, 2014. "Energy Use, Income and Carbon Dioxide Emissions: Direct and Multi-Horizon Causality in Canada," International Journal of Energy Economics and Policy, Econjournals, vol. 4(2), pages 178-188.
    9. Sari, Ramazan & Ewing, Bradley T. & Soytas, Ugur, 2008. "The relationship between disaggregate energy consumption and industrial production in the United States: An ARDL approach," Energy Economics, Elsevier, vol. 30(5), pages 2302-2313, September.
    10. Jalil, Abdul, 2014. "Energy–growth conundrum in energy exporting and importing countries: Evidence from heterogeneous panel methods robust to cross-sectional dependence," Energy Economics, Elsevier, vol. 44(C), pages 314-324.
    11. Kumar, Ronald Ravinesh & Stauvermann, Peter Josef & Patel, Arvind & Kumar, Nikeel, 2017. "The effect of energy on output per worker in the Balkan Peninsula: A country-specific study of 12 nations in the Energy Community," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 1223-1239.
    12. Amiri, Arshia & Zibaei, Mansour, 2012. "Granger causality between energy use and economic growth in France with using geostatistical models," MPRA Paper 36357, University Library of Munich, Germany.
    13. Sari, Ramazan & Soytas, Ugur, 2007. "The growth of income and energy consumption in six developing countries," Energy Policy, Elsevier, vol. 35(2), pages 889-898, February.
    14. Soytas, Ugur & Sari, Ramazan, 2006. "Energy consumption and income in G-7 countries," Journal of Policy Modeling, Elsevier, vol. 28(7), pages 739-750, October.
    15. Farhani, Sahbi & Shahbaz, Muhammad & Sbia, Rashid & Chaibi, Anissa, 2014. "What does MENA region initially need: Grow output or mitigate CO2 emissions?," Economic Modelling, Elsevier, vol. 38(C), pages 270-281.
    16. Jaganath Behera, 2015. "Examined the Energy-Led Growth Hypothesis in India: Evidence from Time Series Analysis," Energy Economics Letters, Asian Economic and Social Society, vol. 2(4), pages 46-56, December.
    17. Ghosh, Sajal, 2010. "Examining carbon emissions economic growth nexus for India: A multivariate cointegration approach," Energy Policy, Elsevier, vol. 38(6), pages 3008-3014, June.
    18. Muhammad Shahbaz & Mete Feridun, 2012. "Electricity consumption and economic growth empirical evidence from Pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 46(5), pages 1583-1599, August.
    19. Lee, Chien-Chiang & Chien, Mei-Se, 2010. "Dynamic modelling of energy consumption, capital stock, and real income in G-7 countries," Energy Economics, Elsevier, vol. 32(3), pages 564-581, May.
    20. Shahbaz, Muhammad & Salah Uddin, Gazi & Ur Rehman, Ijaz & Imran, Kashif, 2014. "Industrialization, electricity consumption and CO2 emissions in Bangladesh," Renewable and Sustainable Energy Reviews, Elsevier, vol. 31(C), pages 575-586.

    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:eee:appene:v:86:y:2009:i:10:p:1887-1893. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    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.