LPG consumption and economic growth, 1975-2016: evidence from Cameroon

Abstract

Purpose This paper aims to examine the causal relationship between liquefied petroleum gas consumption and economic growth in Cameroon over the period from 1975 to 2016. Design/methodology/approach The methodology of this study is based on the unit root, cointegration and causality tests. Cointegration is performed with both Johansen and autoregressive distributed lag bounds approach, while causality is done with the Granger test based on the error correction model (ECM) and Toda-Yamamoto procedure. Findings The cointegration methods confirm the existence of a level relationship, whereas the causal tests of the ECM reveal the existence of a short-run unidirectional causal relationship ranging from liquefied petroleum gas (LPG) consumption to economic growth and a bidirectional causal relationship between long-term and high-causality variables. With the Toda-Yamamoto procedure, unidirectional causality is found to run from economic growth to liquefied petroleum gas consumption. Research limitations/implications These findings imply that an increase in liquefied petroleum gas consumption leads to an increase in economic growth. As a result, supporting energy efficiency policies that aim to reduce liquefied petroleum gas consumption is not an option for Cameroon. Given that LPG consumption shares are still low in Cameroon, the government ought, thus, to increase LPG subsidization, vulgarize and favor policies aimed at encouraging LPG consumption to increase LPG deposits nationwide. This would help increase LPG consumption and consequently could increase economic growth in Cameroon. Originality/value LPG is a fossil fuel and is the less GHG emitter and it is considered as a modern source of energy for cooking in Cameroon households. It scarcity calls on energy policymakers to question the influence LPG consumption could have on economic growth in the short- and long-run. Thus, this paper could contribute to solving the issue of deforestation in Cameroon, especially in the Sahel zone; through the substitution of firewood consumption by LPG consumption in households.

Forecasting petroleum products consumption in Cameroon's household sector using a sequential GMC(1,n) model optimized by genetic algorithms

“…Although kerosene demand is expected to decrease considerably during the period 2018–2025, its consumption alone will contribute on average to 80% of total GHGs from Cameroon's household, while LPG consumption will contribute to the remaining proportion. Although LPG's emissions shares are quite low over this period, it is important to note that LPG shares in households PP demand will be 60% by 2025 [4] , [6] , [11] . Consequently, LPG's emissions shares in total households GHGs will be much higher in the coming years.…”

“…Agriculture, fuelwood usage, and bushfires are the main causes forest degradation in Cameroon [71] , [75] , [76] . Deforestation in the tropical zone 6 and desertification in the Sahelian zone is very worrisome for the government [4] . Fuelwood usage leads to severe deforestation since reforestation is not practiced.…”

“…Therefore, fuelwood that was abundant behind kitchens regardless of geographical zones is now scarce. Nowadays, villagers trek up to 35 km daily to fetch firewood [4] . This scarcity could increase in the next years given the number of households that has been growing since the 2000s.…”

“…LPG and kerosene are the only PP used in Cameroonian households. Kerosene is widely used in rural areas for cooking, lighting and as a fire accelerant, while LPG founds prominent use in urban areas and is only used for cooking [4] , [11] , [71] . PP access rate in urban areas is 65% compared to only 14% in rural areas and the majority of rural communities are not served [71] .…”

“…Indeed, the State of Cameroon intends to launch colossal projects aimed at making large cities the centers of production and consumption necessary for the industrial sector's development. One of the objectives is to limit deforestation in the tropical regions and desertification in the Sahelian regions [4] . Another objective is to reduce GHGs by popularizing clean and modern energies such as electricity, so that the 40% of the current population having access to electricity become 60% by 2025 [2] , [3] , [5] .…”