Skip to main content

Advertisement

SpringerLink
Log in

Economic growth, energy consumption, and carbon emission nexus: fresh evidence from developing countries

  • Research Article
  • Published:
Environmental Science and Pollution Research Aims and scope Submit manuscript

Abstract

The developing countries and emerging economies are crucially contributing to global economic development, energy transition, and climate governance. This paper employs panel cointegration technique to investigate the long-run relationship between carbon emissions and five impacting factors (per capita GDP, primary energy consumption, international trade, fossil proportion, and quadratic per capita GDP) in 50 representative developing countries during 1995–2017. The empirical findings confirm the existence of long-run equilibrium, and the regressing coefficients of fully-modified OLS (FMOLS) indicate that (a) impacting features of the inverted U-shaped curve of Environmental Kuznets Curve (EKC) theory appear in a few countries, such as Mexico, Croatia, Kazakhstan, Iran, Algeria, Indonesia, and Thailand; (b) the energy consumption has statistically positive and significant impacts on boosting the carbon emissions; (c) the negative effect of international trade emerges in the developing nations enjoying trade surpluses; and (d) fossil energy share poses a mixed impact. This paper reveals that the vast and inspiring contribution of developing countries to global carbon emission reduction should attract more international attention and assistance.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2

Similar content being viewed by others

References

  • Al-Iriani MA (2006) Energy–GDP relationship revisited: an example from GCC countries using panel causality. Energy Policy 34(17):3342–3350

    Article  Google Scholar 

  • Ang BW, Su B (2016) Carbon emission intensity in electricity production: a global analysis. Energy Policy 94:56–63

    Article  CAS  Google Scholar 

  • Apergis N, Ozturk I (2015) Testing Environmental Kuznets Curve hypothesis in Asian countries. Ecological Indicators 52:16–22

    Article  Google Scholar 

  • Baek J (2015) A panel cointegration analysis of CO2 emissions, nuclear energy and income in major nuclear generating countries. Applied Energy 145:133–138

    Article  CAS  Google Scholar 

  • Bai J, Ng S (2004) A PANIC attack on unit roots and cointegration. Econometrics 72(4):1127–1178

    Article  Google Scholar 

  • BP (2018) Statistical Review of World Energy. BP, Paris

  • Breitung J (2000) The local power of some unit root tests for panel data. In: Baltagi B (ed) Advances in econometrics, nonstationary panels, panel cointegration, and dynamic panels, vol 15. JAI Press, Amsterdam, pp 161–178

    Chapter  Google Scholar 

  • Breitung J, Pesaran HH (2008) Unit roots and cointegration in panels. The econometrics of panel data: fundamentals and recent developments in theory and practice. Springer Publishers, Berlin, pp 279–322

    Book  Google Scholar 

  • Cai S, Li Q, Wang S, Chen J, Ding D, Zhao B, et al. (2018) Pollutant emissions from residential combustion and reduction strategies estimated via a village-based emission inventory in beijing. Environmental Pollution 238:230–237

  • Cole MA (2004) Trade, the pollution haven hypothesis and the Environmental Kuznets Curve: examining the linkages. Ecological Economics 48:71–81

    Article  Google Scholar 

  • Copeland BR, Taylor MS (2013) Trade and the environment: theory and evidence. Princeton University Press, New Jersey

    Google Scholar 

  • Dickey D, Fuller W (1979) Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association 74:427–431

    Google Scholar 

  • Dinda S (2004) Environmental Kuznets Curve hypothesis: a survey. Ecological economics 49(4):431–455

    Article  Google Scholar 

  • Dogan E, Aslan A (2017) Exploring the relationship among CO2 emissions, real GDP, energy consumption and tourism in the EU and candidate countries: evidence from panel models robust to heterogeneity and cross-sectional dependence. Renewable and Sustainable Energy Reviews 77:239–245

    Article  Google Scholar 

  • Dogan E, Ozturk I (2017) The influence of renewable and non-renewable energy consumption and real income on CO 2 emissions in the USA: evidence from structural break tests. Environmental Science and Pollution Research 24(11):10846–10854

    Article  Google Scholar 

  • Dogan E, Seker F (2016) An investigation on the determinants of carbon emissions for OECD countries: empirical evidence from panel models robust to heterogeneity and cross-sectional dependence. Environment science and pollution research 23:14646–14655

    Article  CAS  Google Scholar 

  • Dogan E, Turkekul B (2016) CO2 emissions, real output, energy consumption, trade, urbanization and financial development: testing the EKC hypothesis for the USA. Environmental Science and Pollution Research 23(2):1203–1213

    Article  Google Scholar 

  • Dogan E, Seker F, Bulbul S (2015) Investigating the impacts of energy consumption, real GDP, tourism and trade on CO2 emissions by accounting for cross-sectional dependence: a panel study of OECD countries. Current Issues in Tourism 20(16):1701–1719

  • Dong F, Long R, Li Z, Dai Y (2016) Analysis of carbon emission intensity, urbanization and energy mix: evidence from China. Natural Hazards 82(2):1375–1391

    Article  Google Scholar 

  • Du L, Wei C, Cai S (2012) Economic development and carbon dioxide emissions in China: provincial panel data analysis. China Economic Review 23(2):371–384

    Article  Google Scholar 

  • Fan J, Da Y, Wan S, Zhang M, Cao Z, Wang Y, Zhang X (2019) Determinants of carbon emissions in ‘Belt and Road initiative’ countries: a production technology perspective. Applied Energy 239:268–279

    Article  Google Scholar 

  • Fang Z, Chang Y (2016) Energy, human capital and economic growth in asia pacific countries - evidence from a panel cointegration and causality analysis. Energy Economics 56:177–184

  • Farhani S, Chaibi A, Rault C (2014) CO2 emissions, output, energy consumption, and trade in Tunisia. Economic Modelling 38:426–434

    Article  Google Scholar 

  • Fei L, Dong S, Xue L, Liang Q, Yang W (2011) Energy consumption-economic growth relationship and carbon dioxide emissions in China. Energy Policy 39(2):568–574

    Article  CAS  Google Scholar 

  • Frees EW (1995) Assessing cross-sectional correlation in panel data. Journal of Econometrics 69:393–414

    Article  Google Scholar 

  • Friedman M (1937) The use of ranks to avoid the assumption of normality implicit in the analysis of variance. Journal of the American Statistical Association 32(200):675–701

    Article  Google Scholar 

  • Galeotti M, Lanza A, Pauli F (2006) Reassessing the Environmental Kuznets Curve for CO2 emissions: a robustness exercise. Ecological Economics 57:152–163

    Article  Google Scholar 

  • Granger CWJ, Newbold P (1974) Spurious regressions in econometrics. Journal of Econometrics 2:111–120

    Article  Google Scholar 

  • Hamit-Haggar M (2012) Greenhouse gas emissions, energy consumption and economic growth: a panel cointegration analysis from Canadian industrial sector perspective. Energy Economics 34(1):358–364

    Article  Google Scholar 

  • Han L, Han B, Shi X, Su B, Lv X, Lei X (2018) Energy efficiency convergence across countries in the context of China’s Belt and Road initiative. Applied Energy 213:112–122

    Article  Google Scholar 

  • Huang Y, Barker T (2012) The clean development mechanism and low carbon development: a panel data analysis. Energy Economics 34(4):1033–1040

    Article  Google Scholar 

  • IEA (2016a) World Energy Outlook 2016. International Energy Agency, Paris

  • IEA (2016b) Key CO2 Emissions Trend. International Energy Agency, Paris

  • Im KS, Pesaran MH, Shin Y (2003) Testing for unit roots in heterogeneous panels. Journal of Econometrics 115:53–74

    Article  Google Scholar 

  • Intergovernmental Panel on Climate Change (IPCC) (2014) Climate Change 2014: Synthesis report. In: Core Writing Team, Pachauri PK, Meyer LA (eds) Contribution of working groups I, II and III to the fifth assessment report of the IPCC. IPCC, Geneva, p 151

    Google Scholar 

  • IPCC (2018) Special report on global warming within 1.5°C. Intergovernmental Panel on Climate Change, Incheon, Korea

  • Islam F, Shahbaz M, Ahmed AU, Alam MM (2013) Financial development and energy consumption nexus in Malaysia: a multivariate time series analysis. Economic Modelling 30:435–441

    Article  Google Scholar 

  • Jiang M, Gao X, Guan Q, Hao X, An F (2019) The structural roles of sectors and their contributions to global carbon emissions: a complex network perspective. Journal of Cleaner Production 208:426–435

    Article  Google Scholar 

  • Kais S, Sami H (2016) An econometric study of the impact of economic growth and energy use on carbon emissions: panel data evidence from fifty eight countries. Renewable and Sustainable Energy Reviews 59:1101–1110

    Article  Google Scholar 

  • Kao C (1999) Spurious regression and residual-based tests for cointegration in panel data. Journal of Economics 90:1–44

    Article  Google Scholar 

  • Kasman A, Duman YS (2015) CO2 emissions, economic growth, energy consumption, trade and urbanization in new EU member and candidate countries: a panel data analysis. Economic Modelling 44:97–103

    Article  Google Scholar 

  • Kim D-H, Suen Y-B, Lin S-C (2019) Carbon dioxide emissions and trade: evidence from disaggregate trade data. Energy Economics 78:13–28

    Article  Google Scholar 

  • Lean HH, Smyth R (2010) CO2 emissions, electricity consumption and output in ASEAN. Appl Energy 87(6):1858–1864

    Article  CAS  Google Scholar 

  • Levin A, Lin CF, Chu CS (2002) Unit root tests in panel data: asymptotic and finite-sample properties. Journal of Econometrics 108:1–24

    Article  Google Scholar 

  • Li H, Li F, Yu X (2018) China’s contributions to global green energy and low-carbon development: empirical evidence under the Belt and Road Framework. Energies 11(6):1527

  • Liobikienė G, Butkus M (2019) Scale, composition, and technique effects through which the economic growth, foreign direct investment, urbanization, and trade affect greenhouse gas emissions. Renewable Energy 132:1310–1322

    Article  Google Scholar 

  • Liu Y, Hao Y (2018) The dynamic links between CO2 emissions, energy consumption and economic development in the countries along “the Belt and Road”. Science of the Total Environment 645:674–683

    Article  CAS  Google Scholar 

  • Lu WC (2017) Renewable energy, carbon emissions, and economic growth in 24 Asian countries: evidence from panel cointegration analysis. Environmental Science & Pollution Research 24(33):26006–26015

    Article  CAS  Google Scholar 

  • Mardani A, Streimikiene D, Nilashi M, Arias Aranda D, Loganathan N, Jusoh A (2018) Energy consumption, economic growth, and CO2 emissions in G20 countries: application of adaptive neuro-fuzzy inference system. Energies 11(10):2771

    Article  Google Scholar 

  • Moon HR, Perron B (2004) Testing for a unit root in panels with dynamic factors. Journal of Econometrics 122:81–126

    Article  Google Scholar 

  • Muradian R, O’Conno M, Martinez-Alier J (2002) Embodied pollution in trade: estimating the ‘environmental load displacement’ of industrialized countries. Ecological Economics 41:51–67

    Article  Google Scholar 

  • Mutascu M (2016) A bootstrap panel Granger causality analysis of energy consumption and economic growth in the G7 countries. Renewable and Sustainable Energy Reviews 63:166–171

    Article  Google Scholar 

  • Narayan PK, Narayan S (2010) Carbon dioxide emissions and economic growth: panel data evidence from developing countries. Energy Policy 38(1):661–666

    Article  Google Scholar 

  • Nguyen KH, Kakinaka M (2019) Renewable energy consumption, carbon emissions, and development stages: some evidence from panel cointegration analysis. Renewable Energy 132:1049–1057

    Article  Google Scholar 

  • Niu S, Ding Y, Niu Y, Li Y, Luo G (2011) Economic growth, energy conservation and emissions reduction: a comparative analysis based on panel data for 8 Asian-Pacific countries. Energy Policy 39(4):2121–2131

    Article  CAS  Google Scholar 

  • Ozcan B (2013) The nexus between carbon emissions, energy consumption and economic growth in Middle East countries: a panel data analysis. Energy Policy 62:1138–1147

    Article  Google Scholar 

  • Pao HT, Chen CC (2019) Decoupling strategies: CO2 emissions, energy resources, and economic growth in the Group of Twenty. Journal of Cleaner Production 206:907–919

    Article  CAS  Google Scholar 

  • Pao HT, Tsai CM (2011) Multivariate Granger causality between CO2 emissions, energy consumption, FDI (foreign direct investment) and GDP (gross domestic product): evidence from a panel of BRIC (Brazil, Russian Federation, India, and China) countries. Energy 36(1):685–693

    Article  Google Scholar 

  • Pao HT, Yu HC, Yang YH (2011) Modeling the CO2 emissions, energy use, and economic growth in Russia. Energy 36(8):5094–5100

    Article  Google Scholar 

  • Pedroni P (1999) Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and Statistics 61:653–670

    Article  Google Scholar 

  • Pedroni P (2000) Fully modified OLS for heterogeneous cointegrated panels. Advanced in Econometrics 15:93–130

    Article  Google Scholar 

  • Pedroni P (2004) Panel cointegration: asymptotic and finite sample properties of fooled time series tests with an application to the PPP hypothesis. Econometric Theory 20:597–625

    Article  Google Scholar 

  • Persyn D, Westerlund J (2008) Error-correction-based cointegration tests for panel data. Stata Journal 8(2):232–241

    Article  Google Scholar 

  • Pesaran MH (2004) General diagnostic tests for cross section dependence in panels. CESifo Working Paper Series No. 1229; IZA Discussion Paper No. 1240. Available at SSRN: https://ssrn.com/abstract=572504

  • Pesaran MH (2007) A simple panel unit root test in the presence of cross-section dependence. Journal of Applied Econometrics 22:265–312

    Article  Google Scholar 

  • Phillips PCB, Sul D (2003) Dynamic panel estimation and homogeneity testing under cross section dependence. Econometrics Journal 6(1):217–259

    Article  Google Scholar 

  • Rauf A, Liu X, Amin W, Ozturk I, Rehman OU, Hafeez M (2018) Testing EKC hypothesis with energy and sustainable development challenges: a fresh evidence from belt and road initiative economies. Environmental Science and Pollution Research 25:32066–32080

  • Shahbaz M, Sinha A (2019) Environmental Kuznets Curve for CO2 emissions: a literature survey. Journal of Economic Studies 46(1):106–168

    Article  Google Scholar 

  • Shahbaz M, Hye QMA, Tiwari AK, Leitão NC (2013) Economic growth, energy consumption, financial development, international trade and CO2 emissions in Indonesia. Renewable and Sustainable Energy Reviews 25:109–121

    Article  Google Scholar 

  • Shahbaz M, Mahalik MK, Shahzad SJH, Hammoudeh S (2019) Does the Environmental Kuznets Curve exist between globalization and energy consumption? Global evidence from the cross-correlation method. International Journal of Finance & Economics 24(1):540–557

    Article  Google Scholar 

  • Sharif Hossain M (2011) Panel estimation for CO2 emissions, energy consumption, economic growth, trade openness and urbanization of newly industrialized countries. Energy Policy 39(11):6991–6999

    Article  CAS  Google Scholar 

  • Sharif A, Raza SA, Ozturk I, Afshan S (2019) The dynamic relationship of renewable and nonrenewable energy consumption with carbon emission: a global study with the application of heterogeneous panel estimations. Renewable Energy 133:685–691

    Article  Google Scholar 

  • Sinha A, Shahbaz M, Balsalobre D (2017) Exploring the relationship between energy usage segregation and environmental degradation in N-11 countries. Journal of Cleaner Production 168:1217–1229

    Article  Google Scholar 

  • Tang X, McLellan BC, Snowden S, Zhang BS, Hook M (2015) Dilemmas for China: energy, economy and environment. Sustainability 7(5):5508–5520

    Article  Google Scholar 

  • Thacker S, Adshead D, Fay M, Hallegatte S, Harvey M et al (2019) Infrastructure for sustainable development. Nature Sustainability 2:324–331

    Article  Google Scholar 

  • Wang S, Fang C, Guan X, Pang B, Ma H (2014) Urbanisation, energy consumption, and carbon dioxide emissions in China: a panel data analysis of China’s provinces. Applied Energy 136:738–749

    Article  Google Scholar 

  • WDI (2018) World Bank Data Indicator. http://data.worldbank.org.cn/indicator

  • Westerlund J (2005) New simple tests for panel cointegration. Econometrics reviews 24:297–316

    Article  Google Scholar 

  • Westerlund J (2007) Testing for error correction in panel data. Oxford Bulletin of Economics and Statistics 69(6):709–748

    Article  Google Scholar 

  • Xu H, Zhang W (2016) The causal relationship between carbon emissions and land urbanization quality: a panel data analysis for Chinese provinces. Journal of Cleaner Production 137:241–248

    Article  CAS  Google Scholar 

  • Yoo SH (2005) Electricity consumption and economic growth: evidence from Korea. Energy Policy 33:1627–1632

    Article  Google Scholar 

  • Yuan J, Zhao C, Yu S, Hu Z (2007) Electricity consumption and economic growth in China: cointegration and co-feature analysis. Energy Economics 29:1179–1191

    Article  Google Scholar 

  • Yuan J, Xu Y, Hu Z, Zhao C, Xiong M, Guo J (2014a) Peak energy consumption and CO2 emissions in China. Energy Policy 68:508–523

    Article  CAS  Google Scholar 

  • Yuan J, Xu Y, Zhang X (2014b) Income growth, energy consumption, and carbon emissions: the case of China. Emerging Markets Finance & Trade 50(5):169–181

    Google Scholar 

  • Zhang C, Lin Y (2012) Panel estimation for urbanization, energy consumption and CO2 emissions: a regional analysis in China. Energy Policy 49:488–498

    Article  Google Scholar 

  • Zhang X, Wang C, Tan Y, Zhang F (2011) Causality between energy consumption and economic growth in Beijing: evidence from cross-industry panel data. Advances In Computer Science, Environment, Ecoinformatics, And Education 217(PT IV):233–237

    Article  Google Scholar 

  • Zhang N, Yu K, Chen Z (2017) How does urbanization affect carbon dioxide emissions? A cross-country panel data analysis. Energy Policy 107:678–687

    Article  Google Scholar 

  • Zhang Y-J, Sun Y-F, Huang J (2018) Energy efficiency, carbon emission performance, and technology gaps: evidence from CDM project investment. Energy Policy 115:119–130

    Article  Google Scholar 

  • Zhu H, Duan L, Guo Y, Yu K (2016) The effects of FDI, economic growth and energy consumption on carbon emissions in ASEAN-5: evidence from panel quantile regression. Economic Modelling 58:237–248

    Article  Google Scholar 

Download references

Acknowledgments

The authors would also like to extend great thanks to anonymous reviewers for their valuable comments which largely improve the academic quality of this paper. The usual caveats apply.

Funding

The authors acknowledge the funding of National Natural Science Foundation of China (71673085), the Fundamental Research Funds for the Central Universities (2018ZD14), and 111 Project (B18021).

Author information

Authors and Affiliations

  1. School of Economics and Management, North China Electric Power University, No. 2, Beinong Road, Beijing, 102206, China

    Xingping Zhang, Haonan Zhang & Jiahai Yuan

  2. Beijing Key Laboratory of New Energy and Low-Carbon Development, North China Electric Power University, Changping, Beijing, 102206, China

    Xingping Zhang & Jiahai Yuan

Authors
  1. Xingping Zhang
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Haonan Zhang
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Jiahai Yuan
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Jiahai Yuan.

Additional information

Responsible editor: Eyup Dogan

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Zhang, X., Zhang, H. & Yuan, J. Economic growth, energy consumption, and carbon emission nexus: fresh evidence from developing countries. Environ Sci Pollut Res 26, 26367–26380 (2019). https://doi.org/10.1007/s11356-019-05878-5

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11356-019-05878-5

Keywords

Search

Navigation