Economic Growth, CO2 Emissions and Energy Consumption: Evidence from Panel Data for South Asian Region

khairul alom

Abstract


Energy is one of the vital key factors of a country economic development and considers most valuable input for sustainable development. Thus, many studies have attempted to look for the direction of causality between economic growth (GDP), CO2 emissions and energy consumption (EC). This paper, consequently, applies the panel unit root tests, panel cointegration methods and panel causality test to investigate the relationship between GDP, CO2 and EC consumption for five South Asian countries including Bangladesh, India, Pakistan, Sri Lanka and Nepal covering the annual period 1972-2010. The finding of this study reveals that there is causal link between EC to CO2 emissions and between CO2 emissions to GDP has been found in the short run. However, in the long run, there is no causality running from GDP and CO2 emissions to EC. In addition, Kao’s panel cointegration test specifies a stable long-term relationship between all these variables.


Keywords


South Asian countries; Energy consumption; Economic growth; CO2 emissions; Panel cointegration; Panel causality

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