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Connectedness between nonrenewable and renewable energy consumption, economic growth and CO2 emission in Vietnam: New evidence from a wavelet analysis

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  • Le, Thanh Ha

Abstract

The studies exploring inter-relations between non-renewable energy consumption, renewable energy consumption, GDP, and CO2 emission are quite limited in Vietnam due to the limitation of data. Different major players in this market, such as investors, regulators, and other financial actors have different time horizons. By applying innovative multivariate wavelet analysis tools, including partial wavelet coherency and partial wavelet gain, this paper investigates these relations in the time and frequency dimensions in Vietnam during the 1985–2019 period. The multiple coherencies between the non-renewable energy consumption and GDP and CO2 growth suggest that these regions were located at medium frequencies (5–12 years) and concentrated on the 1985–2000 period and the 2003–2019 period. Regarding the relation between renewable consumption and GDP and CO2 growth that the region only concentrated in the high-frequency band (from 2 to 12-year frequency-band) running from 1985 to 2001 and low-frequency band (from 22 to 25-year frequency-band) running from 2011 to 2019. The partial coherency between non-renewable energy consumption and GDP reveals two phases. In the first phase (the beginning of sample to 2000), changes in the non-renewable energy consumption led to changes in GDP, and the relation is negative, while GDP is in-phase with non-renewable energy consumption leading in the second phase (from 2000 to 2015). The partial phase-difference between non-renewable energy consumption and CO2 emission suggests that changes in CO2 emission led to changes in non-renewable energy consumption, and the relation was negative. Regarding the partial coherency between renewable consumption and GDP, most regions were located in the 2–12-year frequency band running from 1985 to 2001, from 2001 to 2003, and from 2005 to 2012. During the 1985–2991 period, the results indicate the anti-phase relation with the GDP growth leading, while changes in renewable energy consumption led to changes in GDP growth, and the association is negative from 2001 to 2003. Since 2003, there was an anti-phase relation with the GDP growth leading. Lastly, the partial wavelet coherency of renewable energy consumption and CO2 emission indicates that regions were found to be statistically significant in the 3-4- and 7-15-year frequency band and there was the anti-phase relation with the CO2 emission leading.

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  • Le, Thanh Ha, 2022. "Connectedness between nonrenewable and renewable energy consumption, economic growth and CO2 emission in Vietnam: New evidence from a wavelet analysis," Renewable Energy, Elsevier, vol. 195(C), pages 442-454.
    • Handle: RePEc:eee:renene:v:195:y:2022:i:c:p:442-454
    DOI: 10.1016/j.renene.2022.05.083
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    More about this item

    Keywords

    Multivariate wavelet analysis; Partial wavelet gain; Partial wavelet coherency; Non-renewable energy consumption; Renewable energy consumption; GDP; CO2 emission;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management

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