Advertisement

Environmental Science and Pollution Research

, Volume 23, Issue 7, pp 6563–6573 | Cite as

Testing the relationships between energy consumption, CO2 emissions, and economic growth in 24 African countries: a panel ARDL approach

  • Simplice Asongu
  • Ghassen El Montasser
  • Hassen Toumi
Research Article

Abstract

This study complements existing literature by examining the nexus between energy consumption (EC), CO2 emissions (CE), and economic growth (GDP; gross domestic product) in 24 African countries using a panel autoregressive distributed lag (ARDL) approach. The following findings are established. First, there is a long-run relationship between EC, CE, and GDP. Second, a long-term effect from CE to GDP and EC is apparent, with reciprocal paths. Third, the error correction mechanisms are consistently stable. However, in cases of disequilibrium, only EC can be significantly adjusted to its long-run relationship. Fourth, there is a long-run causality running from GDP and CE to EC. Fifth, we find causality running from either CE or both CE and EC to GDP, and inverse causal paths are observable. Causality from EC to GDP is not strong, which supports the conservative hypothesis. Sixth, the causal direction from EC to GDP remains unobservable in the short term. By contrast, the opposite path is observable. There are also no short-run causalities from GDP, or EC, or EC, and GDP to EC. Policy implications are discussed.

Keywords

Energy consumption CO2 emissions Economic growth Africa 

JEL classification

C52 O40 O55 Q43 Q50 

Notes

Acknowledgments

The authors are highly indebted to the editor and referees for constructive comments.

References

  1. Ackah I, Kizys R (2015) Green growth in oil producing African countries: a panel data analysis of renewable energy demand. Renew Sustain Energy Rev 50(October):1157–1166CrossRefGoogle Scholar
  2. Akbostanci E, Turut-Asi S, Tunc GI (2009) The relationship between income and environment in Turkey: is there an environmental Kuznets curve? Energy Policy 37:861–867CrossRefGoogle Scholar
  3. Akinlo AE (2008) Energy consumption and economic growth: evidence from 11 sub-Sahara African countries. Energy Econ 30(5):2391–2400CrossRefGoogle Scholar
  4. Akinlo AE (2009) Electricity consumption and economic growth in Nigeria: evidence from cointegration and co-feature analysis. J Policy Model 31:681–693CrossRefGoogle Scholar
  5. Akinyemi O, Alege P, Osabuohien E, and Ogundipe A (2015) Energy security and the green growth agenda in Africa: exploring trade-offs and synergies, Department of Economics and Development Studies, Covenant University, NigeriaGoogle Scholar
  6. Akpan US (2014) Impact of regional road infrastructure improvement on intra-regional trade in ECOWAS. Afr Dev Rev 26(S1):64–76CrossRefGoogle Scholar
  7. Akpan GE, Akpan UF (2012) Electricity consumption, carbon emissions and economic growth in Nigeria. Int J Energy Econ Policy 2(4):292–306Google Scholar
  8. Ang JB (2007) CO2 emissions, energy consumption, and output in France. Energy Policy 35(10):4772–4778CrossRefGoogle Scholar
  9. Anyangwe E (2014) Without energy could Africa’s growth run out of steam? theguardian, http://www.theguardian.com/global-development-professionals-network/2014/nov/24/energy-infrastructure-clean-cookstoves-africa (Accessed: 08/09/2015)
  10. Apergis N, Payne JE (2009) CO2 emissions, energy usage, and output in Central America. Energy Policy 37:3282–3286CrossRefGoogle Scholar
  11. Asongu SA (2014a) Correcting inflation with financial dynamic fundamentals: which adjustments matter in Africa? J Afr Bus 15(1):64–73CrossRefGoogle Scholar
  12. Asongu SA (2014b) Does money matter in Africa? New empirics on long- and short-run effects of monetary policy on output and prices. Indian Growth Dev Rev 7(2):142–180CrossRefGoogle Scholar
  13. Asongu SA and Kodila-Tedika O (2015) Is poverty in the African DNA (gene)?, African Governance and Development Institute Working Paper No. 15/011, YaoundéGoogle Scholar
  14. Asongu SA and Rangan G (2015) Trust and quality of growth, African Governance and Development Institute Working Paper No. 15/026, YaoundéGoogle Scholar
  15. Begum RA, Sohag K, Abdullah SMS, Jaafar M (2015) CO2 emissions, energy consumption, economic and population growth in Malaysia. Renew Sustainable Energy Rev 41(January):594–601CrossRefGoogle Scholar
  16. Belloumi M (2009) Energy consumption and GDP in Tunisia: cointegration and causality analysis. Energy Policy 37(7):2745–2753CrossRefGoogle Scholar
  17. Ben Jebli M, Ben Youssef S (2015) The environmental Kuznets curve, economic growth, renewable and non-renewable energy, and trade in Tunisia. Renew Sustain Energy Rev 47(July):173–185CrossRefGoogle Scholar
  18. Bildirici ME, Kayıkçı F (2012) Economic growth and electricity consumption in former Soviet Republics. Energy Econ 34(3):747–753CrossRefGoogle Scholar
  19. Binder M and Offermanns C (2007) International investment positions and exchange rate dynamics: a dynamic panel analysis. CFS Working Paper No. 2007/23, CESifo Working PaperGoogle Scholar
  20. Bölük G, Mehmet M (2015) The renewable energy, growth and environmental Kuznets curve in Turkey: an ARDL approach. Renew Sustain Energy Rev 52(December):587–595CrossRefGoogle Scholar
  21. Boubaker S, Jouini J (2014) Linkages between emerging and developed equity markets: empirical evidence in the PMG framework. North Am JEcon Finance 29(July):322–335CrossRefGoogle Scholar
  22. Breitung J (2000) The local power of some unit root tests for panel data. In: Baltagi BH (ed) Advances in econometrics, volume 15: nonstationary panels, panel cointegration, and dynamic panels. JAY, Amsterdam, pp 161–178CrossRefGoogle Scholar
  23. Brooks C (2008) Introductory Econometrics for Finance. Cambridge University PressGoogle Scholar
  24. Choi I (2001) Unit root tests for panel data. J Int Money Finan 20(2):249–272CrossRefGoogle Scholar
  25. Diao XD, Zeng SX, Tam CM, Tam VWY (2009) EKC analysis for studying economic growth and environmental quality: a case study in China. J Cleaner Prod 17:541–548CrossRefGoogle Scholar
  26. Esso LJ (2010) Threshold cointegration and causality relationship between energy use and growth in seven African countries. Energy Econ 32:1383–1391CrossRefGoogle Scholar
  27. Fosu AK (2015) Growth, inequality and poverty in sub-Saharan Africa: recent progress in a global context. Oxford Dev Stud 43(1):44–59CrossRefGoogle Scholar
  28. Hadri K (2000) Testing for stationarity in heterogeneous panel data. Econ J 3(2):148–161Google Scholar
  29. He J, Richard P (2010) Environmental Kuznets curve for Co2 in Canada. Ecol Econ 69:1083–1093CrossRefGoogle Scholar
  30. Huxster JKX, Uribe-Zarain X, Kempton W (2015) Undergraduate understanding of climate change: the influences of college major and environmental group membership on survey knowledge scores. J Environ Educ 46(3):149–165CrossRefGoogle Scholar
  31. Im KS, Pesaran MH, Shin Y (2003) Testing for unit roots in heterogeneous panels. J Econ 115(1):53–74CrossRefGoogle Scholar
  32. Jumbe CB (2004) Cointegration and causality between electricity consumption and GDP: empirical evidence from Malawi. Energy Econ 26:61–68CrossRefGoogle Scholar
  33. Kifle T (2008) Africa hit hardest by global warming despite its low greenhouse gas emissions, Institute for World Economics and International Management Working Paper No. 108, http://www.iwim.uni-bremen.de/publikationen/pdf/b108.pdf (Accessed: 08/09/2015)
  34. Levin A, Lin CF, Chu CSJ (2002) Unit root test in panel data: asymptotic and finite sample properties. J Econ 108(1):1–24CrossRefGoogle Scholar
  35. Mehrara M (2007) Energy consumption and economic growth: the case of oil exporting countries. Energy Policy 35:2939–2945CrossRefGoogle Scholar
  36. Menyah K, Wolde-Rufael Y (2010) Energy consumption, pollutant emissions and economic growth in South Africa. Energy Economics 32:1374–1382CrossRefGoogle Scholar
  37. Odhiambo NM (2009a) Electricity consumption and economic growth in South Africa: a trivariate causality test. Energy Econ 31(5):635–640CrossRefGoogle Scholar
  38. Odhiambo NM (2009b) Energy consumption and economic growth nexus in Tanzania: an ARDL bounds testing approach. Energy Policy 37(2):617–622CrossRefGoogle Scholar
  39. Olusegun OA (2008) Consumption and economic growth in Nigeria: a bounds testing cointegration approach. J Econ Theory 2(4):118–123Google Scholar
  40. Ongolo S, Karsenty A (2011) La lutte contre la déforestation en Afrique centrale: victime de l'oubli du politique? Ecol Politique 42:71–80CrossRefGoogle Scholar
  41. Ozturk I (2010) A literature survey on energy-growth nexus. Energy Policy 38:340–349CrossRefGoogle Scholar
  42. Ozturk I, Acaravci A (2010) CO2 emissions, energy consumption and economic growth in Turkey. Renew Sustain Energy Rev 14:3220–3225CrossRefGoogle Scholar
  43. Ozturk I, Bilgili F (2015) Economic growth and biomass consumption nexus: dynamic panel analysis for sub-Sahara African countries. Appl Energy 137(1):110–116CrossRefGoogle Scholar
  44. Pedroni P (2004) Panel cointegration. Asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econ Theory 20(3):597–625CrossRefGoogle Scholar
  45. Pesaran MH, Smith RP (2014) Signs of impact effects in time series regression models. Econ Lett 122(2):150–153CrossRefGoogle Scholar
  46. Pesaran MH, Shin Y, Smith RJ (1999) Pooled mean group estimation of dynamic heterogeneous panels. J Am Stat Assoc 94(446):621–634CrossRefGoogle Scholar
  47. Pesaran MH, Shin Y, Smith RJ (2001) Bound testing approaches to the analysis of level relationships. J Appl Econ 16(3):289–326CrossRefGoogle Scholar
  48. Raheem ID, Yusuf AH (2015) Energy consumption-economic growth nexus: evidence from linear and nonlinear models in selected African countries. Int J Energy Econ Policy 5(2):558–564Google Scholar
  49. Shuaibu M (2015) Trade liberalization and intra-regional trade: a case of selected ECOWAS countries. Afr Dev Rev 27(1):27–40CrossRefGoogle Scholar
  50. Shurig S (2015) Who will fund the renewable solution to the energy crisis?, theguardian, http://www.theguardian.com/global-development-professionals-network/2014/jun/05/renewable-energy-electricty-africa-policy (Accessed: 08/09/2015)
  51. Tiwari AK, Apergis N, Olayeni OR (2015) Renewable and nonrenewable energy production and economic growth in sub-Saharan Africa: a hidden cointegration analysis. Appl Econ 47(9):861–882CrossRefGoogle Scholar
  52. Tumwebaze HK, Ijjo AI (2015) Regional economic integration and economic growth in the COMESA region, 1980–2010. Af Dev Rev 27(1):67–77CrossRefGoogle Scholar
  53. Wolde-Rufael Y (2005) Energy demand and economic growth: the African experience. J Policy Model 27(8):891–903CrossRefGoogle Scholar
  54. Wolde-Rufael Y (2006) Electricity consumption and economic growth: a time series experience for 17 African countries. Energy Policy 34(10):1106–1114CrossRefGoogle Scholar
  55. Zhang M, Dai S, Song Y (2015) Decomposition analysis of energy-related CO2 emissions in South Africa. J Energy South Africa 26(1):67–73Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  • Simplice Asongu
    • 1
  • Ghassen El Montasser
    • 2
  • Hassen Toumi
    • 3
  1. 1.African Governance and Development InstituteYaoundéCameroon
  2. 2.Department of Quantitative Methods, École Supérieure de Commerce de TunisUniversity of ManoubaManoubaTunisia
  3. 3.Faculty of Economics and ManagementUniversity of SfaxSfaxTunisia

Personalised recommendations