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The Relationship between Disaggregate Energy Consumption, Economic Growth and Environment for Asian Developing Economies

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  • Ali Raza Cheema

    (Pakistan Institute of Development Economics, Islamabad)

  • Attiya Yasmin Javid

    (Pakistan Institute of Development Economics, Islamabad)

Abstract

This study evaluates the link between disaggregate energy consumption (coal, petroleum, electricity, renewable energy consumption), economic growth and environment for Asian Developing countries. Cointegration tests verify long run relationship among energy consumption and growth, energy consumption and environment degradation along with trade openness and financial development as control variables. To find long run elasticities fully modified OLS is used, which confirms that all forms of disaggregate energy consumption explain positive and significant impact on economic growth. Results also show that all forms of disaggregate energy use more pollute environment (except coal consumption) and also validate the existence of Environmental Kuznets curve. Important policy implication is that government needs to promote renewable energy sector because its increase economic growth and its impact on environment degradation is low as compare to other sources. Investment in renewable energy sector is beneficial for private and public sector after conducting cost and benefit analysis.

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  • Ali Raza Cheema & Attiya Yasmin Javid, 2015. "The Relationship between Disaggregate Energy Consumption, Economic Growth and Environment for Asian Developing Economies," PIDE-Working Papers 2015:115, Pakistan Institute of Development Economics.
  • Handle: RePEc:pid:wpaper:2015:115
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    File URL: http://www.pide.org.pk/pdf/Working%20Paper/WorkingPaper-115.pdf
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    2. Olugbenga A. Onafowora & Oluwole Owoye, 2015. "Structural Vector Auto Regression Analysis of the Dynamic Effects of Shocks in Renewable Electricity Generation on Economic Output and Carbon Dioxide Emissions: China, India and Japan," International Journal of Energy Economics and Policy, Econjournals, vol. 5(4), pages 1022-1032.

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    Keywords

    Disaggregate Energy Consumption; Economic Growth; CO2 Emissions; Environmental Kuznets Curve;

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