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Oil consumption and growth: Is there a threshold effect of greenhouse gases emissions

Author

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  • Nandnaba, Sarah
  • Hailemariam, Abebe
  • Gupta, Rangan
  • Sheng, Xin

Abstract

The paper empirically examines the threshold effect of GHG(s) emissions on the oil consumption-growth nexus. Using a nonlinear local projection approach and an extended historical dataset from 1890 to 2022, we find that the impact of oil consumption on economic growth is conditional on the level of GHG(s) emissions. More specifically, we find that economies in high-emission regimes face a slowdown in growth while those in low-emission regimes benefit from a positive shock in oil. The results have important policy implications for sustainable growth.

Suggested Citation

  • Nandnaba, Sarah & Hailemariam, Abebe & Gupta, Rangan & Sheng, Xin, 2025. "Oil consumption and growth: Is there a threshold effect of greenhouse gases emissions," Innovation and Green Development, Elsevier, vol. 4(3).
    • Handle: RePEc:eee:ingrde:v:4:y:2025:i:3:s2949753125000372
    DOI: 10.1016/j.igd.2025.100240
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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