Advertisement

Environmental Science and Pollution Research

, Volume 26, Issue 18, pp 18790–18803 | Cite as

Convergence of clean energy consumption—panel unit root test with sharp and smooth breaks

  • Yifei CaiEmail author
  • Angeliki N. Menegaki
Research Article
  • 73 Downloads

Abstract

This paper first visits the clean energy consumption for 21 OECD countries and 14 Emerging market countries through a panel unit root test with both sharp and smooth breaks covering the period from 1965 to 2016. The time-varying fitted intercepts of the estimation could better fit the path of clean energy consumption for selected countries. The empirical results suggest that not only sharp breaks should be considered, but also smooth breaks. The economic implications are insightful for the convergence of clean energy consumption for 22 of 35 countries. For USA, Canada, Austria, Germany, Greece, Ireland, UK, Australia, New Zealand, South Korea, Hungary, China, Philippines, and Thailand, the clean energy consumption is divergence. Policy encouragement policy would permanently affect not only clean energy consumption path, but also aggregate economic sectors related to consume clean energy.

Keywords

Clean energy consumption Convergence panel unit root test Sharp breaks Smooth breaks 

Notes

Funding information

Yifei Cai acknowledges the work on this paper is supported by the Australian Government Research Training Program (RTP) scholarship and University Postgraduate Award (UPA).

References

  1. Apergis N, Loomis D, Payne JE (2010) Are fluctuations in coal consumption transitory or permanent? Evidence from a panel of US states. Appl Energy 87(7):2424–2426CrossRefGoogle Scholar
  2. Aslan A, Kum H (2011) The stationary of energy consumption for Turkish disaggregate data by employing linear and nonlinear unit root tests. Energy 36(7):4256–4258CrossRefGoogle Scholar
  3. Bahmani-Oskooee M, Chang T, Wu T (2014) Revisiting purchasing power parity in African countries: panel stationary test with sharp and smooth breaks. Appl Financ Econ 24(22):1429–1438CrossRefGoogle Scholar
  4. Bai J, Perron P (1998) Estimating and testing linear models with multiple structural changes. Econometrica 66:47–78CrossRefGoogle Scholar
  5. Bai J, Perron P (2003) Computation and analysis of multiple structural change models. Journal of applied econometrics, 18(1):1–22Google Scholar
  6. Bai J, Ng S (2004) A PANIC attack on unit roots and cointegration. Econometrica, 72(4):1127–1177Google Scholar
  7. Barassi MR, Cole MA, Elliott RJ (2011) The stochastic convergence of CO 2 emissions: a long memory approach. Environ Resour Econ 49(3):367–385CrossRefGoogle Scholar
  8. Becker R, Enders W, Lee J (2004) Stationarity tests with unattended nonlinearityGoogle Scholar
  9. Cai Y, Sam CY, Chang T (2018) Nexus between clean energy consumption, economic growth and CO2 emissions. J Clean Prod 182:1001–1011CrossRefGoogle Scholar
  10. Carrion-i-Silvestre L, Barrio-Castro DJ, López-Bazo E (2005) Breaking the panels: an application to the GDP per capita. Econ J 8(2):159–175Google Scholar
  11. Chen PF, Lee CC (2007) Is energy consumption per capita broken stationary? New evidence from regional-based panels. Energy Policy 35(6):3526–3540CrossRefGoogle Scholar
  12. Choi I (2001) Unit root tests for panel data. J Int Money Financ 20(2):249–272CrossRefGoogle Scholar
  13. Choi I (2002) Combination Unit Root Tests for CrossSectionally Correlated Panels, mimeo, Hong Kong University of Science and Technology, Hong KongGoogle Scholar
  14. Christidou M, Panagiotidis T, Sharma A (2013) On the stationarity of per capita carbon dioxide emissions over a century. Econ Model 33:918–925CrossRefGoogle Scholar
  15. Demir E, Gozgor G (2018) Are shocks to renewable energy consumption permanent or temporary? Evidence from 54 developing and developed countries. Environ Sci Pollut Res 25(4):3785–3792CrossRefGoogle Scholar
  16. Dickey DA, Fuller WA (1981) Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica 49:1057–1072CrossRefGoogle Scholar
  17. Enders W, Lee J (2012) A unit root test using a Fourier series to approximate smooth breaks. Oxf Bull Econ Stat 74(4):574–599CrossRefGoogle Scholar
  18. Ezcurra R (2007) Is there cross-country convergence in carbon dioxide emissions? Energy Policy 35(2):1363–1372CrossRefGoogle Scholar
  19. Fallahi F, Voia MC (2015) Convergence and persistence in per capita energy use among OECD countries: revisited using confidence intervals. Energy Econ 52:246–253CrossRefGoogle Scholar
  20. Gallant AR (1981) On the bias in flexible functional forms and an essentially unbiased form: the Fourier flexible form. J Econ 15(2):211–245CrossRefGoogle Scholar
  21. Golpe AA, Carmona M, Congregado E (2012) Persistence in natural gas consumption in the US: an unobserved component model. Energy Policy 46:594–600CrossRefGoogle Scholar
  22. Gozgor G (2016) Are shocks to renewable energy consumption permanent or transitory? An empirical investigation for Brazil, China, and India. Renew Sust Energ Rev 66:913–919CrossRefGoogle Scholar
  23. Hasanov M, Telatar E (2011) A re-examination of stationarity of energy consumption: evidence from new unit root tests. Energy Policy 39(12):7726–7738CrossRefGoogle Scholar
  24. Hsu YC, Lee CC, Lee CC (2008) Revisited: are shocks to energy consumption permanent or temporary? New evidence from a panel SURADF approach. Energy Econ 30(5):2314–2330CrossRefGoogle Scholar
  25. Im KS, Pesaran MH, Shin Y (2003) Testing for unit roots in heterogeneous panels. J Econ 115(1):53–74CrossRefGoogle Scholar
  26. Jobert T, Karanfil F, Tykhonenko A (2010) Convergence of per capita carbon dioxide emissions in the EU: legend or reality? Energy Econ 32(6):1364–1373CrossRefGoogle Scholar
  27. Kim YS (2015) Electricity consumption and economic development: are countries converging to a common trend? Energy Econ 49:192–202CrossRefGoogle Scholar
  28. Kwiatkowski D, Phillips PC, Schmidt P, Shin Y (1992) Testing the null hypothesis of stationarity against the alternative of a unit root: how sure are we that economic time series have a unit root? J Econ 54(1–3):159–178CrossRefGoogle Scholar
  29. Lee JW (2013) The contribution of foreign direct investment to clean energy use, carbon emissions and economic growth. Energy Policy 55:483–489CrossRefGoogle Scholar
  30. Lee CC, Chang CP (2009) Stochastic convergence of per capita carbon dioxide emissions and multiple structural breaks in OECD countries. Econ Model 26(6):1375–1381CrossRefGoogle Scholar
  31. Lee J, Strazicich MC (2003) Minimum Lagrange multiplier unit root test with two structural breaks. Rev Econ Stat 85(4):1082–1089CrossRefGoogle Scholar
  32. Levin A, Lin CF, Chu CSJ (2002) Unit root tests in panel data: asymptotic and finite-sample properties. J Econ 108(1):1–24CrossRefGoogle Scholar
  33. Liddle B (2009) Electricity intensity convergence in IEA/OECD countries: aggregate and sectoral analysis. Energy Policy 37(4):1470–1478CrossRefGoogle Scholar
  34. Maddala GS, Wu S (1999) A comparative study of unit root tests with panel data and a new simple test. Oxf Bull Econ Stat 61(S1):631–652CrossRefGoogle Scholar
  35. McKibbin WJ, Stegman A (2005) Convergence and per capita carbon emissions, vol 10, p 2005. CAMA Working Paper SeriesGoogle Scholar
  36. Meng M, Payne JE, Lee J (2013) Convergence in per capita energy use among OECD countries. Energy Econ 36:536–545CrossRefGoogle Scholar
  37. Mishra V, Sharma S, Smyth R (2009) Are fluctuations in energy consumption per capita transitory? Evidence from a panel of Pacific Island countries. Energy Policy 37(6):2318–2326CrossRefGoogle Scholar
  38. Mohammadi H, Ram R (2012) Cross-country convergence in energy and electricity consumption, 1971–2007. Energy Econ 34(6):1882–1887CrossRefGoogle Scholar
  39. Moon HR, Perron B (2004) Testing for a unit root in panels with dynamic factors. J Econ 122(1):81–126CrossRefGoogle Scholar
  40. Narayan PK, Smyth R (2007) Are shocks to energy consumption permanent or temporary? Evidence from 182 countries. Energy Policy 35(1):333–341CrossRefGoogle Scholar
  41. Narayan PK, Narayan S, Popp S (2010) Energy consumption at the state level: the unit root null hypothesis from Australia. Appl Energy 87(6):1953–1962CrossRefGoogle Scholar
  42. Paramati SR, Ummalla M, Apergis N (2016) The effect of foreign direct investment and stock market growth on clean energy use across a panel of emerging market economies. Energy Econ 56:29–41CrossRefGoogle Scholar
  43. Payne JE, Vizek M, Lee J (2017) Stochastic convergence in per capita fossil fuel consumption in US states. Energy Econ 62:382–395CrossRefGoogle Scholar
  44. Perron P (1989) The great crash, the oil price shock, and the unit root hypothesis. Econometrica 57:1361–1401CrossRefGoogle Scholar
  45. Pesaran MH (2004) General diagnostic tests for cross section dependence in panels, CESifo Working Papers No. 1233, BonnGoogle Scholar
  46. Phillips PC, Perron P (1988) Testing for a unit root in time series regression. Biometrika 75(2):335–346CrossRefGoogle Scholar
  47. Presno MJ, Landajo M, González PF (2018) Stochastic convergence in per capita CO2 emissions. An approach from nonlinear stationarity analysis. Energy Econ 70:563–581Google Scholar
  48. Shahbaz M, Tiwari AK, Jam FA, Ozturk I (2014) Are fluctuations in coal consumption per capita temporary? Evidence from developed and developing economies. Renew Sust Energ Rev 33:96–101CrossRefGoogle Scholar
  49. Strazicich MC, List JA (2003) Are CO 2 emission levels converging among industrial countries? Environ Resour Econ 24(3):263–271CrossRefGoogle Scholar
  50. Westerlund J, Basher SA (2007) Can panel data really improve the predictability of the monetary exchange rate model? J Forecast 26(5):365–383CrossRefGoogle Scholar
  51. Wu J, Wu Y, Guo X, Cheong TS (2016) Convergence of carbon dioxide emissions in Chinese cities: a continuous dynamic distribution approach. Energy Policy 91:207–219CrossRefGoogle Scholar

Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Economics, Business SchoolUniversity of Western AustraliaPerthAustralia
  2. 2.Department of Economics and Management of Tourist UnitsAgricultural University of AthensAmfissaGreece
  3. 3.Hellenic Open UniversityPatrasGreece
  4. 4.Open University of CyprusNicosiaCyprus

Personalised recommendations