Journal
SUSTAINABILITY
Volume 10, Issue 3, Pages -Publisher
MDPI
DOI: 10.3390/su10030660
Keywords
coal consumption; economic growth; nexus; panel analysis; dependent panel
Funding
- Human Resources Development Program of the Korea Institute of Energy Technology Evaluation and Planning (KETEP) - Korean government Ministry of Trade, Industry and Energy [20174010201170]
- Energy Efficiency and Resources Program of the Korea Institute of Energy Technology Evaluation and Planning (KETEP) - Korean government Ministry of Trade, Industry and Energy [20152510101880]
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This paper examines the relationship between coal consumption and economic growth for 30 OECD (Organisation for Economic Co-operation and Development) countries and 32 non-OECD countries for 1990-2013 using a multivariate dependent panel analysis. For the analysis, we conducted the common factor defactorization process, unit root test, cointegration test, long-run cointegrating vector, and Granger causality test. Our results suggest the following: First, there is no long-run relationship between coal consumption and economic growth in OECD countries; however, in non-OECD countries, the relationship does exist. Second, excessive coal usage may hinder economic growth in the long run. Lastly, the growth hypothesis (coal consumption affects economic growth positively) is supported in the short run for non-OECD countries. As coal consumption has a positive effect on economic growth in the short run and a negative effect in the long run, energy conservation policies may have adverse effects only in the short run. Thus, non-OECD countries should gradually switch their energy mix to become less coal-dependent as they consider climate change. Moreover, a transfer of technology and financial resources from developed to developing countries must be encouraged at a global level.
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