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Energy consumption, CO 2 emissions, and economic growth: evidence from Indonesia

Listed author(s):
  • Jo-Hee Hwang

    ()

  • Seung-Hoon Yoo

    ()

Registered author(s):

    Energy policy-makers in Indonesia are interested in the causal relationship between energy consumption, CO 2 emissions, and economic growth. Therefore, this paper attempts to analyze the short- and long-run causality issues between energy consumption, CO 2 emissions, and economic growth in Indonesia using time-series techniques. To this end, annual data covering the period 1965–2006 are employed and tests for unit roots, co-integration, and Granger-causality based on an error-correction model are applied. The results show that there is a bi-directional causality between energy consumption and CO 2 emissions. This means that an increase in energy consumption directly affects CO 2 emissions and that CO 2 emissions also stimulate further energy consumption. In addition, the results support the occurrence of uni-directional causality running from economic growth to energy consumption and to CO 2 emissions without any feedback effects. Thus, energy conservation and/or CO 2 emissions reduction policies can be initiated without the consequent destructive economic side effects. Copyright Springer Science+Business Media B.V. 2014

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    File URL: http://hdl.handle.net/10.1007/s11135-012-9749-5
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    Article provided by Springer in its journal Quality & Quantity.

    Volume (Year): 48 (2014)
    Issue (Month): 1 (January)
    Pages: 63-73

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    Handle: RePEc:spr:qualqt:v:48:y:2014:i:1:p:63-73
    DOI: 10.1007/s11135-012-9749-5
    Contact details of provider: Web page: http://www.springer.com

    Order Information: Web: http://www.springer.com/economics/journal/11135

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