The asymmetric relationships between pollution, energy use and oil prices in Vietnam: Some behavioural implications for energy policy-making

Abstract

With rapidly expanding real GDP in Vietnam, it is anticipated that the Vietnamese energy production will increase to meet its rising energy consumption. An important corollary is that pollution will also rise since the energy sector is considered a big polluter in the developing world. This paper brings two important insights to this literature: first and foremost, this paper seeks to establish if any behavioural biases of policy makers have clouded the decision to adopt suitable energy technologies and policies in Vietnam with far-reaching consequences for sustainability in the region. Secondly, in order to detect behavioural biases, it considers the asymmetric effects of increases vis-à-vis decreases in regressors by using the non-linear autoregressive distributed lags (NARDL) models, to examine how such increases or decreases really impact on pollution in Vietnam. Using annual data from 1982 to 2015, the analysis finds that the long-run relationships between pollution, energy use and oil prices have been characterised by non-linear and asymmetric interlinkages to indicate hidden cointegration. We further argue that such hidden cointegration can signal important behavioural biases in (energy) policy-making.

Income, Coal Consumption, And The Environmental Kuznets Curve In Vietnam

“…This finding is opposed to that by Agras and Chapman (1999), which highlights that an oil price increase drives a reduction in energy consumption and energy-related emissions. By contrast, this result is somewhat consistent with that by Apergis and Gangopadhyay (2020), which shows that increasing oil prices is followed by a growth in energy consumption whereas a fall in oil prices diminishes energy consumption in Vietnam. Similarly, Bloch et al (2015) find a positive influence of oil prices on coal consumption in China.…”

“…In such a situation, the amount of coal consumed has increased annually by about 8.6% in the 1984-2019 period and nearly 16% since 2015. As a result, Vietnam is largely dependent on imported coal for its energy needs (Nguyen et al, 2019;Thong et al, 2021) and especially susceptible to energy prices (Apergis and Gangopadhyay, 2020;Pham and Le, 2020). Meanwhile, the reliance on fossil fuels like coal has spurred concerns over adverse consequences on the environment (Al-Mulali et al, 2015;Finenko and Thomson, 2014;Vo and Ho, 2021).…”

Induced Effect of Environmental Regulation on Green Innovation: Evidence from the Increasing-Block Pricing Scheme

“…Existing research on the IBP has focused on demand and policy efficiency [ 12 , 13 ]. The IBP increases the price elasticity of users [ 10 ] and provides a good incentive to reduce the use of electricity by families [ 13 , 40 ].…”

“…Related studies have mainly focused on the demand side, including consumer behavior [ 10 ] and awareness of environment protection and policy efficiency [ 11 , 12 ]. Generally, the expected targets have been reached [ 13 ].…”

Decarbonization of Vietnam’s economy: decomposing the drivers for a low-carbon growth

“…Therefore, it is necessary that energy-based carbon emissions are properly understood so that mitigation policies could be designed for low-carbon economic growth (Huisingh et al 2015;Taka et al 2020). Historically, energy crises (soaring energy prices resulting in power outages) and environmental problems since the 1970s can be found in the literature (Zimmer et al 2015;Apergis and Gangopadhyay 2020). Some studies have recommended strategies to reduce energy use and improve energy efficiency (Baffes et al 2015); however, recent developments in Vietnam are yet to be examined from a macro-policy perspective.…”