CO2 Emissions and Economic Growth of SAARC Countries: Evidence from a Panel VAR Analysis

Abstract

The paper examined the causality in both static and dynamic framework between CO2 emissions and economic growth of SAARC countries over the period 1972-2010 using panel approach. The paper presents the facts obtained on the basis of panel unit root test, panel-cointegration test , panel VECM and Impulse Response functions (IRFs) and Variance decomposition (VDs). IRFs and VDs analysis indicate that CO2 emissions, GDP have positive impact on each other. The result from the application of VECM analysis suggests unidirectional causality running from economic growth to CO2 emissions. The result found contradicts the Environmental Kuznets Curve hypothesis.

Carbon Emissions in the SAARC Countries with Causal Effects of FDI, Economic Growth and Other Economic Factors: Evidence from Dynamic Simultaneous Equation Models

“…Theoretically, the increase in production level may increase the economic growth (EG), and when the production level increases at an intense level, it pollutes the environment. This result corresponds to the prior studies conducted by Pandey and Mishra [ 51 ], and Jaunky [ 67 ]. From the controlling factors, the results show that urban population (UP) and energy consumption (EC) significantly negatively affect CO 2 in the SAARC countries (see Table 4 ).…”

“…The studies that concentrated on a single country to inspect the association between these variables contain Ghosh [ 43 ], Hajilary et al [ 27 ], Lotfalipour, et al [ 44 ], Ozturk and Acaravci [ 45 ], Jalil and Mahmud [ 46 ], and Salahuddin et al [ 26 ]. The studies that focused on multiple countries to inspect the association between these variables contain Arouri, et al [ 47 ], Hossain [ 48 ], Govindaraju and Tang [ 49 ], Sebri and Ben-Salha [ 50 ], Pao and Tsai [ 23 ], Abdouli and Hammami [ 28 ], Omri et al [ 35 ], Pandey and Mishra [ 51 ], Anser, et al [ 52 ], and Rehman and Rashid [ 53 ].…”

“…Moreover, Pandey and Mishra [ 51 ] found the unidirectional causal association from EG to CE in the case of SAARC countries by using the panel VECM model. Additionally, Anser et al [ 52 ] revealed a positive association between EG and CE in the SAARC countries by using an augmented STIRPAT model for the period 1994–2013.…”

The effect of energy and urbanisation on carbon dioxide emissions: evidence from Ghana

“…() obtained similar outcome regarding effect of income, renewable energy and non‐renewable energy for a panel of 25 OECD countries over the period 1980–2010. Pandey and Mishra () reported a U‐shaped relationship between carbon dioxide emissions and economic growth in the context of South Asian Association for Regional Cooperation together with a unidirectional causality from economic growth to carbon dioxide emission was reported in both the short and long run.…”

Environmental Degradation, Economic Growth and Non-renewable Energy in Selected South Asian Countries: Trivariate Analysis From DCCE-MG Approach

“…To achieve this, an unbalanced panel data of per capita GDP (a proxy for economic growth), non-renewable energy per capita and carbon emissions per capita from five selected South Asian 2 countries (Bangladesh, India, Nepal, Pakistan, and Sri Lanka) spanning 1990 to 2018 is used to: (1) investigate the growth-led and energy-led degradation relation; (2) assess if the growth-led and energy-led degradation relation significantly differ across the countries; and (3) establish the direction of causality among the variables. Similar to Shahbaz, Jam, Bibi, and Loganathan (2016), this paper further differs from previous studies on SAARC or South Asian countries (see Sharma, Kishan, and Doig (2014), Uddin and Wadud (2014), Pandey and Mishra (2015), Osmani (2018), Rahman, Saidi, and Mbarek (2020)) by strictly engaging a dynamic trivariate model to analyse the relationship.…”