Testing the Relationships between Energy Consumption, CO2 emissions and Economic Growth in 24 African Countries: a Panel ARDL Approach

Asongu, Simplice and El Montasser, Ghassen and Toumi, Hassen (2015): Testing the Relationships between Energy Consumption, CO2 emissions and Economic Growth in 24 African Countries: a Panel ARDL Approach. Published in: Environmental Science and Pollution Research (December 2015)

Abstract

This study complements existing literature by examining the nexus between energy consumption (EC), CO2 emissions (CE) and economic growth (GDP) in 24 African countries using a panel ARDL approach. The following findings are established. First, there is a long run relationship between EC, CE and GDP. Second, a long term effect from CE to GDP and EC is apparent, with reciprocal paths. Third, the error correction mechanisms are consistently stable. However, in cases of disequilibrium only EC can be significantly adjusted to its long run relationship. Fourth, there is a long-run causality running from GDP and CE to EC. Fifth, we find causality running from either CE or both CE and EC to GDP and inverse causal paths are observable. Causality from EC to GDP is not strong, which supports the conservative hypothesis. Sixth, the causal direction from EC to GDP remains unobservable in the short term. By contrast, the opposite path is observable. There are also no short-run causalities from GDP, or EC, or EC and GDP to EC. Policy implications are discussed.

• Item Type: MPRA Paper
• Language: English
• Keywords: Energy consumption; CO2 emissions; Economic growth; Africa
• Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C52 - Model Evaluation, Validation, and Selection; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O50 - General; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa

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