Impact of Energy Consumption on Economic Growth and Environment: Disaggregated Analysis for Asian Developing Economies
Author: Ali Raza Cheema

This study uses more recently developed panel cointegration (Pedroni, 1999) techniques to evaluate the link between disaggregate energy consumption (coal, petroleum, electricity, renewable energy consumption), economic growth and environment (by incorporating, trade openness and financial development as control variables) in a sample of 8 Asian Developing countries. Cointegration tests verify long run link (relationship) among all variables. To find long run elasticity’s fully modified OLS is used, which confirms that all forms of disaggregate energy consumption explain optimistic, significant and positive impact on economic growth. Results also show that all forms of disaggregate energy use illustrate significant, positive impact on CO 2 emissions (except coal consumption) and also validate existence of EK curve (Environmental, Kuznets curve). For short run dynamics and panel causality analysis VECM (vector error correction, model) is applied, which shows short run dynamics and long run adjustment. 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 sectors. Investment in renewable energy sector is beneficial for private and public sector. For this purpose cost and benefit analysis, of various forms of energy sector needs to be adopted. Supervisor:- Dr. Attiy Yasmin Javid

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Keywords : Disaggregate Energy Consumption, Economic Growth, Environmental Kuznets Curve, Fully Modified OLS, Panel Cointegration
Supervisor: Attiya Yasmin Javid

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