Energy consumption, economic policy uncertainty and carbon emissions; causality evidence from resource rich economies
Abstract
The study uses the World Uncertainty Index to analyze the long-run relationship of economic policy uncertainty and energy consumption for countries with high geopolitical
risk over the period 1996–2017. The Kao test shows a cointegration association between
energy consumption, economic growth, geopolitical risk, economic policy uncertainty,
and carbon dioxide (CO2) emissions. The results based on the Panel Pooled Mean GroupAutoregressive Distributed lag model (PMG-ARDL) show that energy consumption and
economic growth contribute to (CO2) emissions. Additionally, there is a significant
association between economic uncertainty and CO2 emissions in the long-run. The panel
causality analysis by Dumitrescu and Hurlin (2012) shows a bidirectional relationship
between CO2 emissions and energy consumption, economic policy uncertainty and CO2
emissions, economic growth and CO2 emissions, but a unidirectional causality from CO2
emissions to geopolitical risks. The findings call for vital changes in energy policies to
accommodate economic policy uncertainties and geopolitical risks.
Volume
68Collections
The following license files are associated with this item: