The Nexus Between Electricity Consumption, Economic Growth, and CO₂ Emission: An Asymmetric Analysis Using Nonlinear ARDL and Nonparametric Causality Approach

• Main Authors: Philip Chukwunonso Bosah, Shixiang Li, Gideon Kwaku Minua Ampofo, Daniel Akwasi Asante, Zhanqi Wang
• Format: Article
• Language: English
• Published: MDPI AG 2020-03-01
• Series: Energies
• Subjects: electricity consumption; economic growth; carbon emission; asymmetric causality; asymmetric cointegration
• Online Access: https://www.mdpi.com/1996-1073/13/5/1258

This article examines the asymmetric relationship between electric consumption, economic growth, and carbon dioxide emission in 15 countries over the period 1971−2014. We employed a nonlinear auto-regressive distribution Lag (NARDL) model approach to investigate the asymmetric cointegration between variables. Additionally, we applied the asymmetric causality approach to determine the causal relationship between variables. Results confirm nonlinear cointegration between variables in Cameroon, Congo Republic, Zambia, Canada, and the UK. The Wald test results confirm a long-run asymmetric link between electricity consumption, economic growth, and carbon emission in Canada and Cameroon, while a short-run asymmetric effect in the Congo Republic and the UK. Findings from the granger causality test are volatile across variables. The result provides strong support for the symmetric relationship between electric consumption, economic growth, and carbon emission in the short and long run. This study provides new evidence for policymakers to formulate country-specific policies to obtain better environmental quality while achieving sustainable economic growth.