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 language | English |
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Article number | 104571 |
Number of pages | 10 |
Journal | Energy Economics |
Volume | 85 |
DOIs | |
Publication status | Published - Jan 2020 |
Keywords
- ASEAN
- CO2 emissions
- Cross-sectional dependence
- Energy consumption
- Panel data