CO2 emissions, energy consumption and economic growth in the ASEAN-5 countries

a cross-sectional dependence approach

Qaiser Munir, Hooi Hooi Lean, Russell Smyth

Research output: Contribution to journalArticleResearchpeer-review

Abstract

We re-examine the relationship between CO2 emissions, energy consumption (EC) and economic growth (GDP) for the five main Association of Southeast Asian Nations (ASEAN-5) countries over the period 1980–2016. Our main contention is that the findings in previous studies that have examined the relationship between CO2, EC and GDP in the ASEAN-5 are biased because they fail to account for cross-sectional dependence (CD). We show that conventional tests applied to our dataset suggest a misleading conclusion about the Environmental Kuznets Curve (EKC) and Granger causal relationship between CO2, EC and GDP in the presence of CD. When we apply a new panel test of Granger non-causality that addresses CD and heterogeneity, we find considerable heterogeneity. We find unidirectional Granger causality running from GDP to CO2 for Malaysia, the Philippines, Singapore and Thailand; unidirectional causality running from GDP to EC in Indonesia, Malaysia and Thailand; unidirectional causality running from EC to GDP in Singapore and bidirectional causality between GDP and EC in the Philippines. We also find support for the EKC hypothesis for the ASEAN-5 countries.

Original languageEnglish
Article number104571
Number of pages10
JournalEnergy Economics
Volume85
DOIs
Publication statusPublished - Jan 2020

Keywords

  • ASEAN
  • CO2 emissions
  • Cross-sectional dependence
  • Energy consumption
  • Panel data

Cite this

@article{ffce03cc65a34810a6db79013c833c40,
title = "CO2 emissions, energy consumption and economic growth in the ASEAN-5 countries: a cross-sectional dependence approach",
abstract = "We re-examine the relationship between CO2 emissions, energy consumption (EC) and economic growth (GDP) for the five main Association of Southeast Asian Nations (ASEAN-5) countries over the period 1980–2016. Our main contention is that the findings in previous studies that have examined the relationship between CO2, EC and GDP in the ASEAN-5 are biased because they fail to account for cross-sectional dependence (CD). We show that conventional tests applied to our dataset suggest a misleading conclusion about the Environmental Kuznets Curve (EKC) and Granger causal relationship between CO2, EC and GDP in the presence of CD. When we apply a new panel test of Granger non-causality that addresses CD and heterogeneity, we find considerable heterogeneity. We find unidirectional Granger causality running from GDP to CO2 for Malaysia, the Philippines, Singapore and Thailand; unidirectional causality running from GDP to EC in Indonesia, Malaysia and Thailand; unidirectional causality running from EC to GDP in Singapore and bidirectional causality between GDP and EC in the Philippines. We also find support for the EKC hypothesis for the ASEAN-5 countries.",
keywords = "ASEAN, CO2 emissions, Cross-sectional dependence, Energy consumption, Panel data",
author = "Qaiser Munir and Lean, {Hooi Hooi} and Russell Smyth",
year = "2020",
month = "1",
doi = "10.1016/j.eneco.2019.104571",
language = "English",
volume = "85",
journal = "Energy Economics",
issn = "0140-9883",
publisher = "Elsevier",

}

CO2 emissions, energy consumption and economic growth in the ASEAN-5 countries : a cross-sectional dependence approach. / Munir, Qaiser; Lean, Hooi Hooi; Smyth, Russell.

In: Energy Economics, Vol. 85, 104571, 01.2020.

Research output: Contribution to journalArticleResearchpeer-review

TY - JOUR

T1 - CO2 emissions, energy consumption and economic growth in the ASEAN-5 countries

T2 - a cross-sectional dependence approach

AU - Munir, Qaiser

AU - Lean, Hooi Hooi

AU - Smyth, Russell

PY - 2020/1

Y1 - 2020/1

N2 - We re-examine the relationship between CO2 emissions, energy consumption (EC) and economic growth (GDP) for the five main Association of Southeast Asian Nations (ASEAN-5) countries over the period 1980–2016. Our main contention is that the findings in previous studies that have examined the relationship between CO2, EC and GDP in the ASEAN-5 are biased because they fail to account for cross-sectional dependence (CD). We show that conventional tests applied to our dataset suggest a misleading conclusion about the Environmental Kuznets Curve (EKC) and Granger causal relationship between CO2, EC and GDP in the presence of CD. When we apply a new panel test of Granger non-causality that addresses CD and heterogeneity, we find considerable heterogeneity. We find unidirectional Granger causality running from GDP to CO2 for Malaysia, the Philippines, Singapore and Thailand; unidirectional causality running from GDP to EC in Indonesia, Malaysia and Thailand; unidirectional causality running from EC to GDP in Singapore and bidirectional causality between GDP and EC in the Philippines. We also find support for the EKC hypothesis for the ASEAN-5 countries.

AB - We re-examine the relationship between CO2 emissions, energy consumption (EC) and economic growth (GDP) for the five main Association of Southeast Asian Nations (ASEAN-5) countries over the period 1980–2016. Our main contention is that the findings in previous studies that have examined the relationship between CO2, EC and GDP in the ASEAN-5 are biased because they fail to account for cross-sectional dependence (CD). We show that conventional tests applied to our dataset suggest a misleading conclusion about the Environmental Kuznets Curve (EKC) and Granger causal relationship between CO2, EC and GDP in the presence of CD. When we apply a new panel test of Granger non-causality that addresses CD and heterogeneity, we find considerable heterogeneity. We find unidirectional Granger causality running from GDP to CO2 for Malaysia, the Philippines, Singapore and Thailand; unidirectional causality running from GDP to EC in Indonesia, Malaysia and Thailand; unidirectional causality running from EC to GDP in Singapore and bidirectional causality between GDP and EC in the Philippines. We also find support for the EKC hypothesis for the ASEAN-5 countries.

KW - ASEAN

KW - CO2 emissions

KW - Cross-sectional dependence

KW - Energy consumption

KW - Panel data

UR - http://www.scopus.com/inward/record.url?scp=85076854943&partnerID=8YFLogxK

U2 - 10.1016/j.eneco.2019.104571

DO - 10.1016/j.eneco.2019.104571

M3 - Article

VL - 85

JO - Energy Economics

JF - Energy Economics

SN - 0140-9883

M1 - 104571

ER -