CO2 emissions, electricity consumption and output in ASEAN

This study examines the causal relationship between carbon dioxide emissions, electricity consumption and economic growth within a panel vector error correction model for five ASEAN countries over the period 1980-2006. The long-run estimates indicate that there is a statistically significant positive association between electricity consumption and emissions and a non-linear relationship between emissions and real output, consistent with the environmental Kuznets curve. The long-run estimates, however, do not indicate the direction of causality between the variables. The results from the Granger causality tests suggest that in the long-run there is unidirectional Granger causality running from electricity consumption and emissions to economic growth. The results also point to unidirectional Granger causality running from emissions to electricity consumption in the short-run.