Corruption, climate and the energy-environment-growth nexus
Heli Arminen and
Angeliki N. Menegaki
Energy Economics, 2019, vol. 80, issue C, 621-634
This paper examines the causal relationships between economic growth, energy consumption and carbon dioxide (CO2) emissions in high-income and upper-middle-income countries using the simultaneous equations framework, with data from 1985 to 2011. By taking institutional quality (measured by the level of corruption) and climate (measured by average temperatures over the winter and summer months) into account, this is the first study to incorporate both of these factors into a simultaneous equations model within the energy-environment-growth nexus. The dependent variables in the system of three simultaneous equations are real gross domestic product (GDP), energy consumption and CO2 emissions as a proxy for air pollution. The results have two important implications. First, they document a bidirectional causal relationship between GDP and energy consumption but do not provide support for the environmental Kuznets curve (EKC) hypothesis. This is revolutionary in the sense that it indicates that high-income and upper-middle-income countries base their economic growth on a feedback relationship with energy consumption and that the ensuing pollution has not yet reached a maximum point, even in these countries. Second, by implying that climate and weather variations are more important determinants of energy consumption and CO2 emissions than corruption, the results suggest that changes in institutional quality are likely to have only a limited impact on energy and environmental policies.
Keywords: Climate; Corruption; CO2 emissions; Economic growth; Energy consumption; Simultaneous equations modelling (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:80:y:2019:i:c:p:621-634
Access Statistics for this article
Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant
More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().