A Revisit of the Energy-Economy-Environment Nexus with Multi-Regression

Abstract

Economic development leaves its residues on the environment, then it is believed as the cause of environmental damage. Recognizing the real cause of environmental damage during the development process is crucial, as it could prevent the government from using dirty energy sources in developing the economy. This study believes that the real cause of environmental degradation is energy consumption. Considering the importance of the energy-economy-environmental nexus where energy is hypothesized as the driver of the two-the economy and the environment, this study conducts a multi-regression analysis where the economy and environmental degradation are the dependent variables affected by energy consumption as the independent variable. Thus, the study aims to investigate whether energy consumption is the real driver of the economy and environmental degradation by comparing energy consumption impacts on both. The sample was all countries (world and economies group) from 1990-2013. The economy's elements expected to contribute to CO2 emissions (FDI, Trade, Urban population) are also under investigation. The results show that the energy coefficients are always positive and have the largest value in almost all models, indicating that energy drives the economy and environmental quality (represented by CO2 emissions). Following the second hypothesis, the impacts of Urban population, FDI, and Trade on CO2 emissions depend on the development level of the three variables. This study is expected to make the policymakers aware that the energy type they choose could improve the economy and environmental quality or put both as a trade-off.

The impact of the pandemic on environmental health from the perspective of energy sector

“…It also aims to simplify and delimit the scope of the study. Moreover, the use of CO2 emissions to represent environmental damages has been widely used in previous studies [6], [12], [13], [20], [21].…”

“…Environmental damage, therefore, is inevitable in pursuing economic growth. The situation depicts the close relationship between energy, the economy, and the environment or the nexus of the energy-economy-environment [1], [3], [20]. Therefore, energy is essential to initial and develop the economy.…”

“…In addition, the containment policies taken by governments to stop the spread of the virus badly impacted the economy. Given the close relationship between energy and the economy [1], [3], [20], the fall of the world's economy can be easily seen from the decline in world energy consumption during the pandemic.…”

Security–Energy Nexus in Indonesia’s Border: The Case of Natuna

“…China uses a 'maritime defense system' to secure its economic and maritime interests and has established a 'zonal defense' called the 'two island chains' to protect its naval expansion (Buszynski & Sazlan, 2007). Energy resources such as oil and gas are vital for the economy and national development (Afful-Dadzie et al, 2017;Asri & Yusgiantoro, 2022a;Best & Burke, 2018). National development and the economic sector cannot be optimized without support from sufficient energy resources (Asri & Yusgiantoro, 2021a, 2022a.…”

“…Energy resources such as oil and gas are vital for the economy and national development (Afful-Dadzie et al, 2017;Asri & Yusgiantoro, 2022a;Best & Burke, 2018). National development and the economic sector cannot be optimized without support from sufficient energy resources (Asri & Yusgiantoro, 2021a, 2022a.…”