Dynamic Modelling of Causal Relationship between Energy Consumption, CO 2 Emission, and Economic Growth in SE Asian Countries

Jaruwan Chontanawat
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Jaruwan Chontanawat: Department of Social Sciences and Humanities, School of Liberal Arts, King Mongkut’s University of Technology Thonburi, 126 Prachu-Uthit Rd., Thungkru, Bangkok 10140, Thailand

Energies, 2020, vol. 13, issue 24, 1-27

Abstract: Southeast Asian region is fast growing in terms of economy with rapid population growth, high energy consumption, and pollution. Understanding these linkages are crucial to guidance of appropriate policy. This study aims to examine the causal relationship between energy consumption with economic growth and CO 2 emissions of the four selected Asian countries, namely Indonesia, Malaysia, Philippines, and Thailand between the years 1971–2017 using Johansen cointegration method combined with Granger causality model. The results found the evidence of cointegration in all countries implying a long-run relationship among energy consumption, economy and pollution exists. The causality main results show the evidence of unidirectional causality running from economic growth to energy consumption in Indonesia, Malaysia, and Thailand, while the opposite direction was found in Philippines. The results of Indonesia, Malaysia, and Thailand support “conservative hypothesis” suggesting that energy conservation policies could be adopted in these countries as it would not constrain growth of the economies. Whereas the results of Philippines appear to support “growth hypothesis” implying that energy is a key driver to stimulate economy. Limiting the use of energy could affect the economy. Instead, the policies, therefore, should focus on promoting other alternative energy source such as renewable energy in order to maintain sustainable growth.

Keywords: energy consumption; economic growth; CO 2 emission; causality; SE Asian countries (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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