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Economic output, export, fossil fuels, non-fossil fuels and energy conservation: evidence from structural break models with VECMs in South Asia

Environmental Science and Pollution Research volume 28, pages 3162–3171 (2021)Cite this article

Abstract

The study aims to examine the energy-GDP-exports nexus employing structural break models after testing for co-integration in the form of total/aggregate annual time series data of South Asia region. The novelty of the study rests in dividing the aggregate energy into fossil fuel– and non-fossil fuel–based energy consumptions with structural break at 2008 considering the global financial crisis into the aggregate production function framework with labor, capital stock, and exports, ceteris paribus. The findings corroborate that in all the three models estimated with aggregate energy, fossil fuel–based energy, and non-fossil fuel–based energy consumptions respectively, there is evidence of long-run linkages among the selected variables. The analyses of long run elasticities estimated demonstrate that labor and capital have positive and significant impact on the real economic output before the break date in all the three models. It is however intriguing that aggregate energy use remains positive before and after the break date while fossil fuel–based energy becomes insignificant after 2008. Likely, non-fossil fuel–based energy corroborates insignificant impact on real economic output after 2008. These findings have important bearings for the energy conservation options in the region of South Asia especially for changing/reducing the fossil fuel share with the non-fossil fuels, ceteris paribus.

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Acknowledgments

It is acknowledged that the present work emerged from the future prospect given in the PhD dissertation of the author therein grateful to his supervisor Dr. Abdul Salam, Professor of Economics and Chair Abdul Qadir Memorial, Punjab University of Lahore, Pakistan, for his support. We are also thankful to the anonymous reviewers for their useful comments. The author acknowledges the moral support of lovely mom of mohtarma Fatima Daud during this research work and in his academic career since 2017.

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    Muhammad Shakeel

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  1. Muhammad Shakeel
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Muhammad Shakeel has organized the idea and developed the methodological and econometric models. He also interpreted the results and all the other steps in the finalization of the work.

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Correspondence to Muhammad Shakeel.

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Shakeel, M. Economic output, export, fossil fuels, non-fossil fuels and energy conservation: evidence from structural break models with VECMs in South Asia. Environ Sci Pollut Res 28, 3162–3171 (2021). https://doi.org/10.1007/s11356-020-10729-9

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  • DOI: https://doi.org/10.1007/s11356-020-10729-9

Keywords

  • Energy conservation
  • Fossil fuels
  • Economic output
  • Export
  • Non-fossil fuels