This study investigates and provides evidence on the impact of economic growth and non-renewable energy on environmental degradation. Using unbalanced panel data from 1990 to 2018 on five South Asian countries and engaging the dynamic common correlated effects-mean group (DCCE-MG) technique of Ditzen (2016, 2018), findings support the energy-led degradation hypothesis while the growth-led degradation hypothesis does not hold but both are supported from FMOLS and DOLS robustness checks. In order words, non-renewable energy and economic growth significantly drive environmental degradation. Country-level results are mixed with Nepal evidencing energy-led degradation, Pakistan shows growth-led degradation while India indicates growth-led sustainability. Supportively, the Dumitrescu-Hurlin (2012) non-Granger causality test establishes: (1) energy-led and growth-led degradation, (2) feedback causal relation between environmental degradation and non-renewable energy, and (3) unidirectional causality from growth to non-renewable energy i.e. “conservation” hypothesis. Policy implications are discussed.
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Posted 09 Mar, 2021
Received 12 Mar, 2021
Invitations sent on 03 Mar, 2021
On 02 Mar, 2021
On 22 Feb, 2021
On 18 Feb, 2021
Posted 09 Mar, 2021
Received 12 Mar, 2021
Invitations sent on 03 Mar, 2021
On 02 Mar, 2021
On 22 Feb, 2021
On 18 Feb, 2021
This study investigates and provides evidence on the impact of economic growth and non-renewable energy on environmental degradation. Using unbalanced panel data from 1990 to 2018 on five South Asian countries and engaging the dynamic common correlated effects-mean group (DCCE-MG) technique of Ditzen (2016, 2018), findings support the energy-led degradation hypothesis while the growth-led degradation hypothesis does not hold but both are supported from FMOLS and DOLS robustness checks. In order words, non-renewable energy and economic growth significantly drive environmental degradation. Country-level results are mixed with Nepal evidencing energy-led degradation, Pakistan shows growth-led degradation while India indicates growth-led sustainability. Supportively, the Dumitrescu-Hurlin (2012) non-Granger causality test establishes: (1) energy-led and growth-led degradation, (2) feedback causal relation between environmental degradation and non-renewable energy, and (3) unidirectional causality from growth to non-renewable energy i.e. “conservation” hypothesis. Policy implications are discussed.
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