Growth-Globalisation-Emissions Nexus: The Role of Population in Australia

Australia has sustained a relatively high economic growth rate since the 1980s compared to other developed countries. Per capita CO2 emissions tend to be highest amongst OECD countries, creating new challenges to cut back emissions toward international standards. This study explores the dynamics of economic growth, CO2 emissions (including energy consumption), population growth and globalisation (an index of openness). Our contributions toward the literature in an Australian context are the following. First, we employ a newly developed cointegration test by Bayer-Hanck (2013) to establish the long-term dynamics between CO2 emissions and growth in the presence of population growth and trade openness. Second, we find economic growth is not emissions intensive, while energy consumption is emissions intensive. Third, in an environment of increasing population, Australia needs to be energy efficient at the household level, creating appropriate infrastructure for sustainable population growth. Finally, open trade environments have been conducive to combating emissions. Our findings advocate for continued investment in alternative energy sources, particularly renewables and green technologies, as well as the development of proper infrastructure to reduce per capita energy consumption.