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Electricity Consumption–Economic Growth–CO 2 Emissions Nexus in Sub‐Saharan Africa: Evidence from Panel Cointegration
Author(s) -
Gao Jing,
Zhang Lei
Publication year - 2014
Publication title -
african development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.654
H-Index - 32
eISSN - 1467-8268
pISSN - 1017-6772
DOI - 10.1111/1467-8268.12087
Subject(s) - cointegration , nexus (standard) , economics , electricity , consumption (sociology) , kuznets curve , short run , error correction model , causality (physics) , panel data , macroeconomics , econometrics , natural resource economics , engineering , social science , physics , electrical engineering , quantum mechanics , sociology , embedded system
This study explores the causal relationship among electricity consumption, economic growth and CO 2 emissions for a group of 14 sub‐Sahara African (SSA) countries from 1980 to 2009 using panel cointegration and panel vector error correction modelling methods. The findings demonstrate that in the long run electricity consumption has a statistically significant positive impact on CO 2 emissions. The results also reveal that the inverted U‐shaped Environmental Kuznets Curve (EKC) hypothesis exists in the SSA countries' case. The panel causality tests indicate that there is short‐run unidirectional causality running from economic growth to CO 2 emissions and electricity consumption respectively. Simultaneously, there is long‐run bidirectional causality between electricity consumption and economic growth, electricity consumption and CO 2 emissions, economic growth and CO 2 emissions. Depending on the results, relevant policies can be initiated without negatively affecting economic growth.