A Cointegrated Panel Approach With Economic Growth, Energy Consumption And Environmental Kuznets Curve In South Asia

Abstract

South Asia has achieved tremendous economic growth in last few decades. The condition of this region is still vulnerable for inclusive growth and sustainable. The purpose of the paper is investigating the Environmental Kuznets Curve (EKC) hypothesis with knowing the effect of renewable energy consumption (REC) and non-renewable energy consumption (NREC) on environmental degradation for South Asia. To conduct this study five South Asian countries is selected for collecting data over the period 1972-2014. Panel cointegration analysis, estimation of long run relationship and causality test among environmental sustainability and its determining factors have been performed. The results found that EKC hypothesis holds true for this region. There is a negative act for REC and NREC has positive act on environmental degradation. The bidirectional causality between pollution and economic growth (EG) indicates that South Asian region has to face challenges to obtain sustainable and inclusive growth.