CO2 Emissions energy consumption and economic grow

CO2 emissions, energy consumption and economic growth in Association of Southeast Asian Nations (ASEAN) countries: A cointegration approach Behnaz Saboori, Jamalludin Sulaiman Economic Programme, School of Social Sciences, Universiti Sains Malaysia, 11800 USM Penang, Malaysia a r t i c l e i n f o Article history: Received 28 November 2012 Received in revised form 15 February 2013 Accepted 14 April 2013 Available online 20 May 2013 Keywords: Carbon dioxide emissions Energy consumption Economic growth a b s t r a c t This study examines the cointegration and causal relationship between economic growth, carbon dioxide (CO2) emissions and energy consumption in selected Association of Southeast Asian Nations (ASEAN) countries for the period 1971e2009. The recently developed Autoregressive Distributed Lag (ARDL) methodology and Granger causality test based on Vector ErrorCorrection Model (VECM) were used to conduct the analysis. There was cointegration relationship between variables in all the countries under the study with statistically significant positive relationship between carbon emissions and energy consumption in both the short and longrun. The longrun elasticities of energy consumption with respect to carbon emissions are higher than the shortrun elasticities. This implies that carbon emissions level is found to increase in respect to energy consumption over time in the selected ASEAN countries. A significant nonlinear relationship between carbon emissions and economic growth was supported in Singapore and Thailand for the longrun which supports the Environmental Kuznets Curve (EKC) hypothesis. The Granger causality results suggested a bidirectional Granger causality between energy consumption and CO2 emissions in all the five ASEAN countries. This implies that carbon emissions and energy consumption are highly interrelated to each other. All the variables are found to be stable suggesting that all the estimated models are stable over the study period.