Causality among Energy Consumption, CO2 Emission, Economic Growth and Trade

Srinivasan P and Inder Siddanth Ravindra

Foreign Trade Review, 2015, vol. 50, issue 3, 168-189

Abstract: The present study attempts to examine the causal nexus between energy consumption, CO 2 emissions, economic growth and trade in India using the Perron (1989) unit root test, Gregory and Hansen (1996) cointegration test and vector error-correction model (VECM). The study results exhibit a long-run relationship between energy consumption, CO 2 emissions, economic growth and trade in India. The empirical results confirm that energy consumption influences the economic activity in the short run, implying that higher rate of economic growth is driven by consumption demand for energy in the economy. This is also well in consistence with the findings of Paul and Bhattacharya (2004) in the Indian context. Further, the study detects one-way causation that exists from energy use to CO 2 emission and trade, and CO 2 emissions to economic growth in the short run.

Keywords: Energy consumption; economic growth; CO2 emissions; trade; cointegration; causality (search for similar items in EconPapers)
JEL-codes: Q43 Q53 Q56 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (32)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:fortra:v:50:y:2015:i:3:p:168-189

DOI: 10.1177/0015732515589441

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