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Does Energy Consumption Impact The Environment? Evidence from Australia Using the JJ Bayer-Hanck Cointegration Technique and the Autoregressive Distributed Lag Test

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  • Avishek Khanal

    (University of Southern Queensland, Toowoomba, Australia.)

Abstract

This study investigates the impact of energy consumption on environmental pollution in Australia using time series data from 1971 to 2015. Gross domestic product (GDP), total population (TP), and financial development (FD) are included as control variables. In achieving the objective, this study employ unit root test, cointegration test, and autoregressive distributed lag (ARDL) long-run and short-run methodology to examine the nexus between energy consumption, carbon dioxide (CO2) emissions, Gross Domestic Product (GDP), total population (TP), and financial development (FD). The results of ARDL long-run and short-run reveals that energy consumption is the most substantial determinant that impacts environmental pollution. However, the empirical findings suggest that GDP, TP, and FD are insignificant in contributing to an increase in CO2 emissions. Thus, this study concludes that policymakers and attention on energy consumption trend and pattern is crucial for effective policies on environmental pollution.

Suggested Citation

  • Avishek Khanal, 2021. "Does Energy Consumption Impact The Environment? Evidence from Australia Using the JJ Bayer-Hanck Cointegration Technique and the Autoregressive Distributed Lag Test," International Journal of Energy Economics and Policy, Econjournals, vol. 11(4), pages 185-194.
    • Handle: RePEc:eco:journ2:2021-04-23
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    Cited by:

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    5. Umar Nawaz Kayani & Misbah Sadiq & Mustafa Raza Rabbani & Ahmet Faruk Aysan & Farrukh Nawaz Kayani, 2023. "Examining the Relationship between Economic Growth, Financial Development, and Carbon Emissions: A Review of the Literature and Scientometric Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 489-499, March.

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    More about this item

    Keywords

    Electricity consumption; Carbon dioxide emissions; GDP; Bayer-Hanck (BH) cointegration technique; ARDL;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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