Fossil fuel consumption, economic growth and CO2 emissions. Causality evinced from the BRICS world

Rochna Arora and Dr. Baljit Kaur
Additional contact information
Rochna Arora: Guru Nanak Dev University, India
Dr. Baljit Kaur: Guru Nanak Dev University, India

Theoretical and Applied Economics, 2020, vol. XXVII, issue 4(625), Winter, 131-142

Abstract: The present study looks at the long term relationship among fossil fuel consumption, economic growth and CO2 emissions in the BRICS economy. The data runs from the period 1990- 2014. The unit root tests prove that the data contain unit root following which Pedroni’s and Kao’s cointegration test is applied. The results of cointegration prove that there is a long term relationship that exists. The long run estimates from DOLS and FMOLS show that increase in fossil fuel consumption will increase growth but at the same time with more carbon emissions the level of growth will decrease. Additionally increase in economic growth will reduce the amount of CO2 emissions thus favouring Kuznets inverted U hypothesis. Finally causality results are arrived at by using Dumitrescu-Hurlin panel causality technique. The results from causality tests show that unidirectional causality from energy to GDP; bidirectional relationship between emissions and GDP and unidirectional causality from fuel consumption to environmental degradation. The causality directions serve important policy implications for the government of the emerging economies to focus more on non-conventional sources of energy so as to keep the environment in the best of its health and at the same time make growth sustainable in the long run.

Keywords: energy consumption; economic growth; emissions; causality; BRICS. (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://store.ectap.ro/articole/1497.pdf (application/pdf)
http://www.ectap.ro/articol.php?id=1497&rid=141 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:agr:journl:v:4(625):y:2020:i:4(625):p:131-142

Access Statistics for this article

Theoretical and Applied Economics is currently edited by Mircea Dinu

More articles in Theoretical and Applied Economics from Asociatia Generala a Economistilor din Romania / Editura Economica Contact information at EDIRC.
Bibliographic data for series maintained by Mircea Dinu ().