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The Carbon-Neutral Energy Consumption and Emission Volatility: The Causality Analysis of ASEAN Region

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  • Shu Wu

    (Sino-German College, University of Shanghai for Science and Technology, Shanghai 200093, China)

  • Majed Alharthi

    (Finance Department, College of Business, King Abdulaziz University, P.O. Box 344, Rabigh 21911, Saudi Arabia)

  • Weihua Yin

    (Business School, Shanghai Jian Qiao University, Shanghai 200444, China)

  • Qaiser Abbas

    (Department of Economics, Ghazi University, Dera Ghazi Khan 32200, Pakistan)

  • Adnan Noor Shah

    (Department of Agricultural Engineering, Khwaja Fareed University of Engineering and Information Technology, Rahim Yar Khan 64200, Pakistan)

  • Saeed ur Rahman

    (Department of Economics, Ghazi University, Dera Ghazi Khan 32200, Pakistan)

  • Jamal Khan

    (Institute for Region and Urban–Rural Development, Wuhan University, Wuhan 430072, China)

Abstract

The use of renewable energy sources and carbon emissions has been debated from various perspectives throughout recent decades. However, the causal relationship between green energy sources and carbon emissions volatility has received limited attention. This study aims to close a knowledge gap in this area. The current study analyzes the renewable energy sources (wind, hydro, and geothermal) and carbon emissions of four ASEAN countries (Indonesia, Thailand, Vietnam, and the Philippines) between 2000 and 2019. The present study combined Chudik and Pesaran’s (2015) newly developed Dynamic Common Correlated Effects (DCCE) with cutting-edge investigation tools such as first- and second-generation unit root tests; CS-dependence; Variance inflation factor test for multicollinearity; and Pedroni, Kao, and Wester Lund tests of co-integration. The Granger causality test is also used to check the short-term and long-term causal effects within the renewable energy sources and green energy sources, and carbon volatility. According to the empirical results, green energy sources make a positive and vital contribution to reducing carbon emissions growth in the above-noted ASEAN economies. Furthermore, short- and long-run causality runs from green energy sources to carbon emission volatility in the region. A significant causality relationship has also been observed within the green energy sources of ASEAN.

Suggested Citation

  • Shu Wu & Majed Alharthi & Weihua Yin & Qaiser Abbas & Adnan Noor Shah & Saeed ur Rahman & Jamal Khan, 2021. "The Carbon-Neutral Energy Consumption and Emission Volatility: The Causality Analysis of ASEAN Region," Energies, MDPI, vol. 14(10), pages 1-14, May.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:10:p:2943-:d:557799
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