The determinants of electricity consumption for ASEAN countries

Abstract

The present study investigates the causal relationship between ASEAN seven member countries electricity consumption (EC) and some determinants such as gross domestic product (GDP), exports (EXP) and carbon dioxide emission (CO2) using vector autoregressive (VAR) framework via vector error correction (VEC) model for the period from 1980-2015. The findings show that the effect of the chosen determinants is different among the seven countries. Within the sample period, by utilizing Granger causality test, out of the seven countries, only four revealed either unidirectional or bidirectional causality running from EC to the three determinants, GDP, EXP and CO2. Whereas, thru forecast error variance decomposition (FEVD), forecasting beyond the sample period uncovered a shock to EC will also spread to GDP, EXP and CO2. The present study suggests that ASEAN should take note in designing their electricity policy, since electricity affect and be affected by other factors. In addition, ASEAN also should find solutions on how to control CO2 emission through EC.

Carbon Dioxide (CO2) Emission, Energy Consumption and Economic Growth: Evidence from Selected Southeast Asia Countries

“…Therefore, economic growth can influence a higher amount of energy consumption (due to fossil fuel), carbon dioxide emissions and other environmental pollution. Previous studies in Asian countries done by Ismail, Mahmud and Abdul Rahman (2017), Lean and Smyth (2009), and Shaari, Abdul Razak and Hasan Basri (2017) found that energy consumption was related to economic growth and it can cause an increase in carbon dioxide emissions. For example, Lean and Smyth (2009) indicate that there is a significant relationship between energy consumption, carbon dioxide emissions and economic growth among Asian countries over the period .…”

“…The author also found that bi-directional long-run causality exists between energy consumption and economic growth, and uni-directional short-run causality exists between economic growth and energy consumption. Similarly, Ismail et al (2017) also suggested that there is an existence of a bi-directional relationship between energy consumption and economic growth in Asian countries.…”

The impact of transport energy consumption and foreign direct investment on CO2 emissions in ASEAN countries

“…Similarly, while the local aspects of transport-related pollution, such as air and noise pollution in urban centers, have been analyzed, the role of transportation in climate change and global warming has been largely ignored in the literature on environmental economics (Arsenio et al, 2016). Ismail et al (2017) strongly recommend that future research should focus on the influence of increasing transportation on the environment, since the contribution of transportation to pollution has been growing over the last two decades.…”