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Oil Consumption, CO 2 Emission, and Economic Growth: Evidence from the Philippines

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  • Kyoung-Min Lim

    (Department of Energy Policy, Graduate School of Energy & Environment, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 139-743, Korea)

  • Seul-Ye Lim

    (Department of Energy Policy, Graduate School of Energy & Environment, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 139-743, Korea)

  • Seung-Hoon Yoo

    (Department of Energy Policy, Graduate School of Energy & Environment, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 139-743, Korea)

Abstract

This paper attempts to investigate the short- and long-run causality issues among oil consumption, CO 2 emissions, and economic growth in the Philippines by using time series techniques and annual data for the period 1965–2012. Tests for unit root, co-integration, and Granger-causality tests based on an error-correction model are presented. Three important findings emerge from the investigation. First, there is bi-directional causality between oil consumption and economic growth, which suggests that the Philippines should endeavor to overcome the constraints on oil consumption to achieve economic growth. Second, bi-directional causality between oil consumption and CO 2 emissions is found, which implies that the Philippines needs to improve efficiency in oil consumption in order not to increase CO 2 emissions. Third, uni-directional causality running from CO 2 emissions to economic growth is detected, which means that growth can continue without increasing CO 2 emissions.

Suggested Citation

  • Kyoung-Min Lim & Seul-Ye Lim & Seung-Hoon Yoo, 2014. "Oil Consumption, CO 2 Emission, and Economic Growth: Evidence from the Philippines," Sustainability, MDPI, vol. 6(2), pages 1-13, February.
    • Handle: RePEc:gam:jsusta:v:6:y:2014:i:2:p:967-979:d:33200
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