Effects of Energy Consumption on GDP: New Evidence of 24 Countries on Their Natural Resources and Production of Electricity

Abstract

Because of rapid economic expansion, China, the USA, and India have become the largest energy producers and sources of CO2 emissions in the world. They burned over 45% of global fuels in 2016. Meanwhile, the developing strategies of 24 polluted states to decrease fossil energy consumption without additional economic output. This paper explores the effect of world top polluted countries’ CO2 emission, their GDP and production of electricity by potential indicators and identifies the basic factors that contribute to changes in an environment where petroleum, natural gas, coal, nuclear, biomass, and other renewable energy and hydroelectric sources are examined with GDP per capita. We estimate our data for the period from 1968 to 2017 and use the GLM model. The results show that more production of electricity is causing abnormal CO2 emissions. The Granger causality test shows that there is a unidirectional relationship between energy consumption and economic advancement. Also, there is a short-run bidirectional causality that exists among the energy indicators. We find a unilateral causality between energy consumption and economic growth. Therefore, the consumption of energy might be conductive of 24 (polluted) countries and better economic development; the consumption of energy may be failsafe and guaranteed, while we should limit the resources of countries.

Beta decoupling relationship between CO2 emissions by GDP, energy consumption, electricity production, value-added industries, and population in China

“…Because of high pressure, China cut its CO2 emissions from all sources of coal and announced it would cut CO2 emissions (per-unit) of GDP by 40% to 45% in 2020 from 2005 [ 40 , 72 , 73 ]. While as for the reduction of CO2 emissions, environmental quality and water shift from coal to shale gas will improve consumption and public health [ 74 , 75 ].…”

The Impact of Renewable and Non-Renewable Energy Consumption on Aggregate Output in Pakistan: Robust Evidence from the RALS Cointegration Test

“…Similarly, Paul & Bhattacharya (2004) and Bunnag (2023) have found a two-way causal relationship between energy consumption and economic growth in Thailand and India, respectively. Other studies by Khan and Kong (2020) and Jayasinghe et al (2022) have found a unidirectional causal relationship between energy consumption and GDP in the short and long-run. However, studies by Ahmad et al (2020aAhmad et al ( , 2020b have found a bidirectional causal relationship between investment in energy and regional product growth in China.…”

Renewable Energy, Economic Growth and Economic Development Nexus: A Bibliometric Analysis

“…Most studies are analyses of statistical inferences of countries or a country studied in isolation. There are many studies covering various economies [28][29][30][31][32][33][34], for example [35][36][37][38]. Ref.…”

“…[36], 53 countries for Ref. [37], and in [38], 24 countries are heterogeneous economies. However, when observing the studies that opt for groups, there is a direction to investigate specific groups with some similarities, whether geographical, economic and cultural, among others.…”