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What drives carbon dioxide emissions in the long-run? Evidence from selected South Asian Countries

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  • Ahmed, Khalid
  • Rehman, Mujeeb Ur
  • Ozturk, Ilhan

Abstract

This study empirically investigates the relationship between CO2 emission and four of its potentially contributing factors (i.e., energy consumption, income, trade openness and population) using time series data from 1971 to 2013 on five selected economies of South Asia. After confirming that all the series are stationary using unit root test process, the study incorporates three different and advance panel cointegration tests i.e. Pedroni- Kao- and Johansen-Fisher-panel cointegration. All the panel cointegration tests confirm that all the variables cointegrated. The long-run association between the variables is checked using FMOLS-grouped and individual cross-section country in the panel. The FMOLS grouped results show that energy consumption, trade openness and population increases environmental degradation in the panel countries with exception of income which has negative impact and sounds the existence of Environmental Kuznet curve between income and emission. The innovative accounting approach using variance decomposition test and impulse response function is applied to examine the causality amongst the underlined vectors. The results show that there is bidirectional causality between energy consumption and trade openness and uni-directional causality running from energy consumption, trade openness and population to CO2 emission. The results enumerate that the energy consumption and population density will increase in long-run and foresee further environmental degradation in the region.

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  • Ahmed, Khalid & Rehman, Mujeeb Ur & Ozturk, Ilhan, 2017. "What drives carbon dioxide emissions in the long-run? Evidence from selected South Asian Countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 1142-1153.
  • Handle: RePEc:eee:rensus:v:70:y:2017:i:c:p:1142-1153
    DOI: 10.1016/j.rser.2016.12.018
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    Cited by:

    1. Kwakwa, Paul Adjei & Alhassan, Hamdiyah & Adu, George, 2018. "Effect of natural resources extraction on energy consumption and carbon dioxide emission in Ghana," MPRA Paper 85401, University Library of Munich, Germany.
    2. repec:eee:rensus:v:81:y:2018:i:p2:p:2144-2159 is not listed on IDEAS
    3. repec:eee:rensus:v:80:y:2017:i:c:p:990-1016 is not listed on IDEAS
    4. repec:eee:energy:v:128:y:2017:i:c:p:487-495 is not listed on IDEAS

    More about this item

    Keywords

    Carbon dioxide emissions; Energy consumption; Income; Trade openness; Population growth;

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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