(a) Department of Economics, Institute of Business Administration (IBA), Karachi, Pakistan
(b) Economics Program, School of Social Sciences, Universiti Sains Malaysia, 11800 USM, Penang, Malaysia
(c) Department of Economics, Monash Business School, Monash University, Australia
We re-examine the relationship between CO2 emissions, energy consumption (EC) and economic growth (GDP) for the five main Association of Southeast Asian Nations (ASEAN-5) countries over the period 1980–2016. Our main contention is that the findings in previous studies that have examined the relationship between CO2, EC and GDP in the ASEAN-5 are biased because they fail to account for cross-sectional dependence (CD). We show that conventional tests applied to our dataset suggest a misleading conclusion about the Environmental Kuznets Curve (EKC) and Granger causal relationship between CO2, EC and GDP in the presence of CD. When we apply a new panel test of Granger non-causality that addresses CD and heterogeneity, we find considerable heterogeneity. We find unidirectional Granger causality running from GDP to CO2 for Malaysia, the Philippines, Singapore and Thailand; unidirectional causality running from GDP to EC in Indonesia, Malaysia and Thailand; unidirectional causality running from EC to GDP in Singapore and bidirectional causality between GDP and EC in the Philippines. We also find support for the EKC hypothesis for the ASEAN-5 countries.
Cite
Munir, Q., Lean, H., Smyth, R. 2020. CO2 emissions, energy consumption and economic growth in the ASEAN-5 countries: A cross-sectional dependence approach. Energy Economics. 85. Article 104571. 10.1016/j.eneco.2019.104571.
ASEAN Centre for Energy (ACE) is an intergovernmental organisation within ASEAN structure that represents the 10 ASEAN Member States’ (AMS) interests in the energy sector.
