Environment Systems and Decisions

, Volume 37, Issue 3, pp 353–366 | Cite as

The relationship among economic growth, CO2 emissions, and energy use in the APEC countries: a panel VAR approach



The aim of this paper is to analyze the relationship among economic growth, carbon dioxide emissions, and energy use for 19 APEC countries over the 1960–2013 years. Using a panel VAR technique, a three-variable VAR is estimated. Empirical findings illustrate that no causal relationship emerges between real GDP and energy use. Thus, our empirical evidence is in line with the “neutrality hypothesis.” Moreover, panel cointegration tests show that a long-run equilibrium relationship is questionable for the APEC countries. Granger causality analyses confirm our previous results, since in nine countries any causal relationship between GDP and energy is found.


Economic growth CO2 emissions Energy use APEC Panel data 

JEL classification

B22 C33 N55 Q48 


  1. Aalto P (2014) Energy market integration and regional institutions in East Asia. Energy Policy 74:91–100CrossRefGoogle Scholar
  2. Abrigo MRM, Zicchino L (2016) Estimation of panel vector autoregression in stata. The Stata J 16(3):778–804Google Scholar
  3. Apergis N, Ozturk N (2015) Testing environmental kuznets hypothesis in Asian countries. Ecol Ind 52:16–22CrossRefGoogle Scholar
  4. Arellano M, Bover O (1995) Another look at the instrumental variable estimation of error component models. J Econom 68:29–51CrossRefGoogle Scholar
  5. Asia Pacific Energy Research Center (APERC) (2002) Energy efficiency indicators and potential energy savings in APEC economies. APERC, TokyoGoogle Scholar
  6. Blundell R, Bond S (1997) Initial conditions and moment restrictions in dynamic panel data models. J Econom 87:115–143CrossRefGoogle Scholar
  7. Bo S (2011) A Literature Survey on Environmental Kuznets Curve. Energy Procedia 5:1322–1325CrossRefGoogle Scholar
  8. Carrion-i-Silvestre JLl, del Barrio T, López-Bazo E (2005) Breaking the panels: an application to GDP per capita. Economet J 8:159–175CrossRefGoogle Scholar
  9. Crompton P, Wu Y (2005) Energy consumption in China: past trends and future directions. Energy Econ 27:195–208CrossRefGoogle Scholar
  10. Eberhardt M, Teal F (2010) Productivity analysis in global manufacturing production. Department of Economics, University of Oxford Discussion Paper, 515Google Scholar
  11. Holtz Eakin D, Newey W, Rosen H (1988) Estimating vector autoregression with panel data. Econometrica 56:1371–1395CrossRefGoogle Scholar
  12. Hsiao C (2003) Analysis of panel data. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  13. Hu JL, Kao CH (2007) Efficient energy-saving targets for APEC economies. Energy Policy 35:373–382CrossRefGoogle Scholar
  14. Jin J, Zhou D, Zhou P (2014) Measuring environmental performance with stochastic environmental DEA: the case of APEC economies. Econ Model 38:80–86CrossRefGoogle Scholar
  15. Kapetanios G, Pesaran MH, Yamagata T (2011) Panels with Nonstationary Multifactor Error Structures. J Econom 160(2):326–348CrossRefGoogle Scholar
  16. Karaman Orsal DD (2007) Comparison of panel cointegration tests. SFB 649 Discussion Paper. 649, 2007–029Google Scholar
  17. Kraft J, Kraft A (1978) On the relationship between energy and GNP. J Energy Dev 3:401–403Google Scholar
  18. Kuznets S (1955) Economic growth and income inequality. Am Econ Rev 45(1):1–28Google Scholar
  19. Lean HH, Smyth R (2010) CO2 emissions, energy consumption and output in ASEAN. Business and Economics, Development Research Unit Discussion Paper. DEVDP 09-13Google Scholar
  20. Lee CC, Chang CP (2008) Energy consumption and economic growth in Asian economies: a more comprehensive analysis using panel data. Resour Energy Econ 30:50–65CrossRefGoogle Scholar
  21. Lee K, Oh W (2006) Analysis of CO2 emissions in APEC countries: a time-series and a cross-sectional decomposition using the log mean Divisia method. Energy Policy 34:2779–2787CrossRefGoogle Scholar
  22. Li Z (2003) An econometric study on China’s economy, energy and environment to the year 2030. Energy Policy 31:1137–1150CrossRefGoogle Scholar
  23. Liu Y, Yan B, Zhou Y (2016) Urbanization, economic growth, and carbon dioxide emissions in China: a panel cointegration and causality analysis. J Geog Sci 26(2):131–152CrossRefGoogle Scholar
  24. Love I, Zicchino L (2006) Financial development and dynamic investment behavior: evidence from panel VAR. Q Rev Econ Financ 46:190–210CrossRefGoogle Scholar
  25. Magazzino C (2012) On the relationship between disaggregated energy production and GDP in Italy. Energy Environ 23(8):1191–1207CrossRefGoogle Scholar
  26. Magazzino C (2014a) Electricity demand, GDP and employment: evidence from Italy. Front Energy 8(1):31–40CrossRefGoogle Scholar
  27. Magazzino C (2014b) Energy consumption and GDP in Italy. Environ Dev Sustain 16(2):137–153Google Scholar
  28. Magazzino C (2014c) A panel VAR Approach of the Relationship among economic growth, CO2 emissions, and energy use in the ASEAN-6 countries. Int J Energy Econ Policy 4(4):546–553Google Scholar
  29. Mahadevan R, Asafu-Adjaye J (2007) Energy consumption, economic growth and prices: a reassessment using panel VECM for developed and developing countries. Energy Policy 35:2481–2490CrossRefGoogle Scholar
  30. Masih AMM, Masih R (1996) Electricity consumption, real income and temporal causality: results from a multicountry study based on cointegration and error correction modeling techniques. Energy Econ 18:165–183CrossRefGoogle Scholar
  31. Narayan PK (2008) Is Asian per capita GDP panel stationary? Empir Econ 34(3):439–449CrossRefGoogle Scholar
  32. Neumayer E (2013) Weak versus strong sustainability: exploring the limits of two opposing paradigms. Edward Elgar, CheltenhamCrossRefGoogle Scholar
  33. Nickell S (1981) Biases in dynamic models with fixed effects. Econometrica 49:1417–1426CrossRefGoogle Scholar
  34. Niu S, Ding Y, Niu Y, Li Y, Luo G (2011) Economic growth, energy conservation and emissions reduction: a comparative analysis based on panel data for 8 Asian-Pacific countries. Energy Policy 39:2121–2131CrossRefGoogle Scholar
  35. Ozturk I (2010) A literature survey on energy-growth nexus. Energy Policy 38:340–349CrossRefGoogle Scholar
  36. Ozturk I, Acaravci A (2010) The causal relationship between energy consumption and GDP in Albania, Bulgaria, Hungary and Romania: evidence from ARDL bound testing approach. Appl Energy 87:1938–1943CrossRefGoogle Scholar
  37. Ozturk I, Acaravci A (2011) Electricity consumption and real GDP causality nexus: evidence from ARDL bounds testing approach for 11 MENA countries. Appl Energy 88:2885–2892CrossRefGoogle Scholar
  38. Pedroni P (1999) Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxf Bull Econ Stat 61:653–678CrossRefGoogle Scholar
  39. Pedroni P (2004) Panel cointegration: asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis: new results. Econom Theory 20:597–627CrossRefGoogle Scholar
  40. Pesaran MH (2006) Estimation and inference in large heterogeneous panels with a multifactor error structure. Econometrica 74(4):967–1012CrossRefGoogle Scholar
  41. Pesaran MH, Smith RP (1995) Estimating long-run relationships from dynamic heterogeneous panels. J Econom 68(1):79–113CrossRefGoogle Scholar
  42. Pesaran MH, Shin Y, Smith RP (1999) Pooled Mean group estimation of dynamic heterogeneous panels. J Am Stat Assoc 94(446):621–634CrossRefGoogle Scholar
  43. Ramstetter ED (2000) Recent trends in foreign direct investment in Asia: the aftermath of the crisis to late 1999. Working Paper Series, 2000–2002, FebruaryGoogle Scholar
  44. Samuelson RD (2014) The unexpected challenges of using energy intensity as a policy objective: examining the debate over the APEC energy intensity goal. Energy Policy 64:373–381CrossRefGoogle Scholar
  45. Sheng P, Guo X (2016) The long-run and short-run impacts of urbanization on carbon dioxide emissions. Econ Model 53:208–215CrossRefGoogle Scholar
  46. Sims CA (1980) Macroeconomics and reality. Econometrica 48:1–48CrossRefGoogle Scholar
  47. Skeer J, Wang Y (2007) China on move: oil price explosion. Energy Policy 35:678–691CrossRefGoogle Scholar
  48. Solow RM (1974) Intergenerational equity and exhaustible resources. Review of Economic Studies. Symposium, 29–46Google Scholar
  49. Soytas U, Sari R (2003) Energy consumption and GDP: causality relationship in G-7 countries and emerging markets. Energy Econ 25:33–37CrossRefGoogle Scholar
  50. Stern DI, Enflo K (2013) Causality between energy and output in the long-run. Lund Papers in Economic History. 126Google Scholar
  51. Stiglitz JE (1979) A neoclassical analysis of the economics of natural resources. In: Smith VK (ed) Scarcity and growth reconsidered. Johns Hopkins Press, Baltimore, pp 36–66Google Scholar
  52. Stock JH, Watson MW (2011) Introduction to econometrics. Pearson Education, CambridgeGoogle Scholar
  53. Warr BS, Ayres RU (2010) Evidence of causality between the quantity and quality of energy consumption and economic growth. Energy 35:1688–1693CrossRefGoogle Scholar
  54. Wu PI, Chen CT, Cheng PC, Liou JL (2014) Climate game analyses for CO2 emission trading among various world organizations. Econ Model 36:441–446CrossRefGoogle Scholar
  55. Zhu H, Duan L, Guo Y, Yu K (2016) The effects of FDI, economic growth and energy consumption on carbon emissions in ASEAN-5: evidence from panel quantile regression. Econ Model 58:237–248CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2017

Authors and Affiliations

  1. 1.Department of Political SciencesRoma Tre UniversityRomeItaly
  2. 2.Italian Economic Association (SIE)RomeItaly
  3. 3.Royal Economic Society (RES)RomeItaly

Personalised recommendations