Renewable and nonrenewable energy consumption, real GDP and CO2 emissions nexus: a structural VAR approach in Pakistan

Shahbaz Shabbir (), Muhammad Zeshan and Shahbaz Muhammad
Authors registered in the RePEc Author Service: Muhammad Shahbaz

MPRA Paper from University Library of Munich, Germany

Abstract: Any rise in real GDP crafts higher energy demand in Pakistan. This short-term rising energy requirement is fulfilled with the help of nonrenewable and renewable energy consumption, but nonrenewable energy consumption adds more in it. The rise in nonrenewable energy consumption lifts real GDP up in short-run. Forecast error variance decomposition illustrates nonrenewable energy consumption alone passes 87% variation in the CO2 emissions. This verifies fossil fuels are accountable for environmental degradation in Pakistan. The CO2 emissions worsen economic activity, real GDP falls but renewable energy consumption augments. This elevation in renewable energy consumption is the proof of stabilization efforts that are being initiated by official authorities as CO2 emissions reach to alarming level. The rise in renewable energy consumption boosts economic activity, and real GDP breeds. Most of times, an increase in renewable energy consumption is an effort to substitute it with nonrenewable energy consumption, resulting in lower level of CO2 emissions.

Keywords: Energy Consumption; Real GDP; CO2 Emissions (search for similar items in EconPapers)
JEL-codes: Q4 (search for similar items in EconPapers)
Date: 2011-11-17, Revised 2011-11-18
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Journal Article: Renewable and Nonrenewable Energy Consumption, Real GDP and CO2 Emissions Nexus: A Structural VAR Approach in Pakistan (2014)
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