Regional Differences in the Dynamic Linkage between CO2 Emissions, Sectoral Output and Economic Growth

Transcription

1 Busness School W O R K I N G P A P E R S E R I E S Workng Paper 24-4 Regonal Dfferences n the Dynamc Lnkage between CO2 Emssons, Sectoral Output and Economc Growth Md. Al Mamun Kaz Sohag Md. Abdul Hannan Ma Gaz Salah Uddn Ilhan Ozturk IPAG Busness School 84, Boulevard Sant-German 756 Pars France IPAG workng papers are crculated for dscusson and comments only. They have not been peer-revewed and may not be reproduced wthout permsson of the authors.

2 Regonal Dfferences n the Dynamc Lnkage between CO 2 Emssons, Sectoral Output and Economc Growth Md. Al Mamun Department of Busness Admnstraton, East West Unversty, Dhaka-22, Bangladesh. Emal: mamunacademc@gmal.com; alm@ewubd.edu Kaz Sohag Insttute of Clmate Change (IKP), Natonal Unversty of Malaysa, Malaysa. Emal: sohagkazewu@gmal.com Md. Abdul Hannan Ma Professor of MIS, Unversty of Dhaka, Bangladesh. Emal: hannan@du.ac.bd Gaz Salah Uddn Lnköpng Unversty, Sweden & IPAG Busness School, France Emal: gaz.salah.uddn@lu.se Ilhan Ozturk Faculty of Economcs and Admnstratve Scences, Cag Unversty, Turkey Emal: lhanozturk@cag.edu.tr

3 . Abstract Envronmental degradaton measured by CO 2 emssons s a sgnfcant challenge to sustanable economc development. Owng to sgnfcant dfferences n the emprcal relatonshp between the economc growth and CO 2 emssons and polces adopted by dfferent countres to overcome the challenge are not decsve. Ths study ams to generalze our knowledge about the relatonshp between CO 2 emssons and economc growth across the world for perod. Besdes, t explores whether the transformaton of dfferent economes (e.g. agraran to ndustral and ndustral to sophstcated servce economy) over the past few decades yelded any sgnfcant postve mpact towards sustanable economc development by reducng the level of CO 2 emsson. Emprcal results suggest () except for hgh-ncome-countres, Envronmental Kuznets Curve (EKC) s a general phenomenon across the world, and () the transformaton of dfferent economes towards a servce economy has produced more polluton n hgh ncome countres and less polluton n low and mddle ncome countres. Keywords: CO 2 emssons, Envronmental Kuznets Curve, Sectoral output. JEL Classfcaton: C23, Q2, Q4, Q43, Q56.. Introducton Over the last two and half decades, there s an ncreasng threat of global warmng caused by ncreased greenhouse gas emsson. CO 2 emssons alone account for 58.8% of the greenhouse gas emsson n the world (Zhenlng, 23). Azomahou et al. (26) argue that the exstng global energy system and the economc development across the world are drectly responsble for such a result. Gven ths realty, a study on the regonal dfferences n the dynamc lnkage between CO 2 emssons, sectoral output and economc growth s mportant at least for three reasons: Frst, varous emprcal studes nvestgatng the economc growth and CO 2 emssons nexus provde nconclusve, nconsstent and partal understandng of ths ssue. However, a comprehensve and conclusve understandng n ths regard s a must as we am at developng an effcent and effectve global framework to counter the problem of greenhouse gas and focus more on sustanable development rather than the economc growth tself. Second, gven the global thrve for perpetual economc growth; queston has been rased f economc growth and ecologcal harmony s a non-exstent publc good? Such queston streams from the nconclusve fndngs of the exstence of envronment Kuznets curve (EKC) n varous economcs around the world. Although, from the tme Grossman and Krueger 2

4 (99) frst test the EKC by focusng on the level of urban ar polluton, tll today, a sgnfcant number of studes (e.g. Panayotou, 993; Robers and Grmes, 997; Shafk, 994, Akbostanc et al., 29; Jaunky 2; Cho et al., 2; Narayan and Popp 22; Baek et al., 23) have examned the envronmental consequences of economc growth by ncorporatng dfferent catalysts lke trade lberalzaton, foregn drect nvestment, urbanzaton, sze of the populaton, etc. Each of these emprcal studes has ts own dmenson and has contrbuted to our greater understandng of the economc growth and natural ecologcal balance paradox. However, exstng emprcal evdences regardng the presence of EKC across varous countres are nconclusve, and the fndngs are senstve to the study perod chosen, the methodology used, the country or regon selected and the lack of unformty n the selecton of other ntervenng varables. Such nconclusve result has clouded the effort to develop a global consensus on polcy ntatves to augment a harmonous coexstence between economc development and envronmental preservaton. Thrd, economc growth acheved and persuaded stll by varous countres sgnfcantly dffers n ther structure. Some countres hstorcally nhert agrculture sector as the prmary engne of economc growth, whle others rely on ndustral or servce sectors. Due to the ncreasng mportance of the knowledge economy n global GDP, a large number of countres today are shftng from tradtonal agrculture and ndustral sectors toward a more sophstcated servce sector. World Bank (2) suggest that, n post ndustralzed perod, there s a tremendous growth of servce sector output wth the agrculture sector contrbutng only 2%, whle servce sector contrbutng 66% of hgh-ncome countres share of GDP. Therefore, the potental for these sectors generatng a dfferent level of economc growth vs-à-vs dfferent level of CO 2 emsson cannot be ruled out. However, emprcal nvestgatons about the relatve contrbuton of sector-wse output on CO 2 emssons across regons are non-exstent. Ths s mportant because, there s a possblty that dfferent sectors mght contrbute dfferently n the overall level of CO2 emssons and knowledge about the sector contrbuton wll help us to develop an envronmentally harmonous pro-growth strategy. Therefore, the am of ths study s to provde concrete polcy recommendatons by provdng a specfc answer to some key questons so as to deal wth the problem of CO 2 emssons. The questons nclude: ) whether the economc growth and CO 2 emsson nexus can be generalzed across the world wth dfferent economc regons showng sgnfcant dfferences n the level of economc growth and output structure; ) whether a focus on sectoral output and CO 2 emsson can uncover the most envronmentally desrable growth sector to pursue; and ) whether some countres should produce less and allow others to produce more f output produced by the former countres generates relatvely more CO 2 emsson and f the former countres receves approprate fnancal compensaton from the latter countres to enable overall reducton of CO 2 emsson of the world? The rest of paper s as follows: In secton 2 revew of the recent lterature s provded whereas secton 3 descrbes the data and outlnes the methodology of the analyss. In secton 4, results and dscusson are presented and fnally secton 5 concludes the paper. 2. Lterature Revew The vast maorty of the exstng lteratures have ether focused on a specfc country or ( e.g. Dean, 22; Dean and Lovely, 28; Shen, 28; Weber et al., 28; Yan and Yang, 2 ; Bloch et al., 22; Cho et al., 2; and Wang, 2 focuses on Chna; Alam et al., 22 focused on Bangladesh; Soytas et al., 29 and Ozturk and Acaravc, 2 on Turkey; Baek et al., 23; Km, 2 on South Korea; Twar, 2; and Ozturk and Uddn, 22 on Inda; 3

5 Essen, 2 on Ngera; Menyah, 2 on USA; Saboor et al., 22 on Malaysa, etc.) or specfc geographc or economc regons (e.g. Pao (2) on BRIC countres; Acaravc and Ozturk (2) on EU countres; Arour (22) on MENA countres; Borhan (23) on eght Asan countres; Moomaw & Unruh (997) and Paggo et al., (22) on OECD countres; Coondoo et al. (28) on Afrca, Amerca, Asa and European countres; Hossan (2) on ndustralzed countres; whle Fredl et al. (23) on small economes, Al-Mulal et al. (23) on Latn Amerca and Carbbean etc. Evdently, lteratures focusng on specfc economc regons have mparted more generalzed nsght whle lteratures focusng on a specfc country have mparted more specfc nsght. Although the maorty of the emprcs have prmarly concluded dfferent magntudes of postve relatonshps between CO 2 emsson and economc growth, others have documented qute dfferent results, as well. For nstance, Selden and Song (994) and Galeott and Lanza (25) reaffrm the EKC hypothess; Holtz-Eakn and Selden (995) fnd a monotonc rsng curve; Shafk and Bandyopadhyay (992), De Bruyn (998), Roca et al. (2), and Lantz and Feng (26) etc. fnd a non-monotonc relatonshp; Shafk (994), Grossman and Krueger (995), and Fredl and Getzner (23), etc. fnd an N-shape relatonshp; Robers and Grmes (997), Cole et al., (997), Schmalensee et al., (998), Galeott and Lanza (26), Apergs and Payne (29), and Lean and Smyth (2) report an nverted U-shape relatonshps n CO 2 emsson and economc growth nexus. Thus the fndngs have complcated our understandng about the relatonshp between CO 2 emsson and economc growth and led to an nconclusve polcy framework to deal wth the ever ncreasng challenge of greenhouse gas. The concluson about economc growth and CO 2 emsson becomes even more clouded when emprcal results argue the presence of contrastng causalty n respect to the drecton to the relatonshp, as well. For example, Mash and Mash (998), Stern (2) and Shu and Lam (24) fnd a undrectonal causalty from energy consumpton and CO 2 emsson to aggregate output; whle Mash and Mash (997), Asafu-Adaye (2), Soytas and Sar (23), Oh and Lee (24), Yoo (25), Wolde-Rufael (26) etc. fnd b-drecton causalty n growth and CO 2 emsson nexus; and others lke Agras and Chapman (999), Fredl and Getzner (23), Martnez-Zarzoso and Bengochea-Morancho (24), Rchmond and Kaufman (26), Dnda and Coondoo (26), Manag and Jena (28), Jall and Mahmud (29) reveal no sgnfcant relatonshp between economc growth and envronmental pollutants.e. hgher natonal ncome does not necessarly mean hgher amount of emssons of pollutants. Many studes also fnd dfferent results usng a varety of emprcal models such Ganger causalty (Knapp and Mookeree, 995; Stern, 993; Aqeel and Butt, 2; Yuan et al., 27; and Ghosh, 2 etc); dynamc causalty test (Pao et al., 2; Sharf M. Hossan, 2), tme seres technques (Akbostanc et al., 29; Cho et al., 2; Jaunky, 2), ordnary least square method (Lse, 26); star model (Km et al., 2); the short and long-run elastcty (Narayan and Popp, 22); vector error correcton model based bounds testng approach (Saboor et al., 22), and panel autoregressve methodologes (Wang, 22; Arour et al., 22; Baek et al. 23). Knapp and Mookeree (995) usng Granger causalty test document statstcally sgnfcant relatonshp between human actvtes,.e. populaton growth and CO 2 emssons. Ther fndngs created a new avenue for augmentng CO 2 emsson and economc growth nexus n the presence of addtonal exogenous. Recently, usng tme seres model, Akbostanc et al. 4

6 (29) conclude that CO 2 emssons and ncome tend to have a monotoncally ncreasng relatonshp n the long run. Usng the same method, Jaunky (2) confrms EKC hypothess for 36 hgh-ncome-countres to acknowledge the fndng of Akbostanc et al. (29) result. Cho et al. (2) usng tme-seres data from 97 to 26, nvestgate the exstence of EKC n the presence of trade openness for one of the most thrvng economes lke Chna, a new ndustralzed economy lke Korea and developed economy lke Japan. The estmated EKC shows dfferent temporal patterns across countres, hghlghtng dfferences n natonal characterstcs. The result shows N-Shaped curve for Chna, U-shaped curve for Japan, nverted U-shaped curve for Korea and Japan and U-shape for Chna. Pao et al. (2) examne a dynamc causal relatonshp between pollutant emssons, energy consumpton and output for BRIC countres. The study documents a postve and statstcally sgnfcant longrun equlbrum effect of energy consumpton on emssons, whle real output exhbts the nverted U-shape pattern wth the threshold ncome. And n the short term, changes n emssons are drven mostly by n energy consumpton. The study also documents a strong bdrectonal causalty between energy consumpton and emssons, energy consumpton and output n the long run; whle strong undrectonal casualtes from emssons and energy consumpton to output n the short run. Sharf M. Hossan (2) examnes the dynamc causal relatonshps between CO 2 emssons, energy consumpton, economc growth, trade openness and urbanzaton for newly ndustralzed countres. Usng the tme-seres data, he concludes that long-run elastcty of CO 2 emssons wth respect to energy consumpton s twce the elastcty of short run. However, the study found no evdence of long-run causal relatonshp between emsson and economc growth, except for undrectonal short-run causalty from economc growth and trade openness to energy consumpton, urbanzaton and CO 2 emssons. Narayan and Popp (22) examne the EKC hypothess based upon the short and long-run ncome elastcty n respect to CO 2 emsson and fnd that some countres should play a greater role n reducng CO 2 emssons. Usng OLS method, Lse (26) concludes that CO 2 emssons and ncome exhbt a lnear relatonshp rather than an EKC path for Turkey. Say and Yucel (26), however, refute such result as spurous snce, under OLS process, the problem of statonarty exsts n data set. Controllng for gross fxed captal nvestment and labor by employng Toda and Yamamoto (TY hereafter) (995) procedure under Granger causalty n a multvarate framework, Soytas et al. (29) came up wth one of the most nterestng fndngs for Turkey. The study fnds that CO 2 emsson Granger causes energy consumpton whle the vce-versa s not. Furthermore, lack of a long-run causal lnks between ncome and CO 2 emssons sgnfes that a reducton n CO 2 emsson does not necessarly mean a compromse wth economc growth for Turkey. Usng the star model wth Korean data, Km et al. (2) argue that there s nterdependence between CO 2 emssons and economc growth. Such nterdependence shows a sgnfcant nonlnear dynamcs due to the asymmetrc mean-revertng property n the autoregressve process. Baek et al. (23) examne the exstence of the EKC n Korea usng the autoregressve dstrbuted lag (ARDL) approach. The study fnds evdence supportng the exstence of EKC hypothess for Korea for over the past four decades. Furthermore, nuclear energy (rather than electrcty from fossl fuels) and energy consumpton exhbts a far more benefcal effect on envronmental qualty both n short and n long-run. Wang et al. (2) usng panel co-ntegraton tests for 28 Chnese provncal data fnd an nverted U-shaped relaton between CO 2 emsson wth energy consumpton and economc growth. The study also fnds that the per-capta CO 2 emsson n Chna s much hgher relatve to other emergng economes n the world. The reasons behnd such fndngs are due to the uneven economc development, excessve use of energy, varaton n the level of economc 5

7 growth among the provnces. More recently, employng bounds testng approach for Malaysan data, Saboor et al. (22) document a long-run causal relatonshp between economc growth and CO 2 emssons represented n an nverted-u shape curve. However, there s a lack of causaltes between CO 2 and ncome n the short-run and undrectonal causalty from ncome to CO 2 emssons n the long-run. Usng varous panel methodologes for 2 MENA countres data, Arour et al. (22) suggest a sgnfcant postve mpact of energy consumpton on CO 2 emssons n the long-run, whle a quadratc relatonshp between real GDP and CO 2 emssons to confrm the EKC hypothess. Whle Wang (22), also confrms negatve economc growth and CO 2 emsson nexus n low growth, postve nexus n the medum growth and nsgnfcant nexus n hgh-growth countres. In terms of the number of countres covered (.e. 98 countres), Wang (22) produces the most comprehensve study to examne the non-lnear relatonshp between CO 2 emssons from ol and GDP n the presence of populaton growth. The study fnds a threshold effect n the relaton, and t concludes a dfferent degree of mpact of ol CO 2 emssons on the dfferent level of economc growth. 3. Data and Methodology 3. Data The study uses World Development Indcators (WDI) dataset from 98 to 29. Due to the nsuffcent number of observaton of dependent varable, a total of 36 countres have been selected for the study. These countres are dvded nto fve maor group: lower ncome countres (LIC), lower mddle-ncome countres (LMIC), upper mddle-ncome countres (UMIC), hgh-ncome OECD countres (HIOECD) and fnally hgh-ncome non-oecd countres (HINOECD). The dependent varable n ths study s CO 2 emsson per capta metrc tons, whch nclude CO 2 produced durng consumpton of sold, lqud, gas fuels and gas flarng. Addtonal varables nclude GDP growth rate (GDPG) as the proxy for economc growth, trade openness (TO) to account for the effect of economc lberalzaton, agrculture value added (AVA), ndustry value added (IVA), and servce value added (SVA) to account for the comparatve effect of sectoral output on CO 2 emssons. The ncluson of sectoral output s ndeed one of the unque features of ths study. Fnally, log of the total populaton (lnpo) rather than urbanzaton s used snce urbanzaton s a lnear proporton to the sze of the total populaton n most countres. 3.2 Emprcal methodologes The dynamc relatonshps among CO 2 emssons, GDPG, IVA, SVA, AVA, TO, and populatons have been examned by usng a seres of carefully desgned testng procedures: Frst, the test of panel multcollnearty usng Farrar-Glauber (976) methods. The presence of multcollnearty among the regressors leadng to model msspecfcaton s a concern n the current study snce the study ncludes a large number of varables. Assumng that x are normally and ndependently dstrbuted, f the varables are orthogonal, there s no multcollnearty and vce-versa? Second, an examnaton of panel multcollnearty and panel unt roots test assumng cross sectonal ndependence; thrd, the test of long run contegratng relatonshp between the varables of nterest usng Westerlund (27) method; Fourth, the examnaton of varous dynamc panel methodologes are used to nvestgate the relatonshp between CO 2 and sectoral output n the presence of selected exogenous varables usng Pesaran et al. (999) for dfferent regons Panel unt root test Snce the semnal paper by Nelson and Plosser (982), the examnaton of unt root n macro tme-seres data become a conventon (Al Mamun, et al. 22). In recent year, varous panel unt root test methodologes have grown. For example, the frst-generaton panel unt root 6

8 tests methodologes (Maddala and Wu (999), Levn et al. (22) and Im et al. (23)) based on the assumpton of the cross-sectonal ndependence across unts; the second-generaton unt root tests methodologes (Ba and Ng (24), Smth et al. (24), Moon and Perron (24), Cho (26) and Pesaran (27)) wth the assumpton of cross-sectonal dependence across unts, and fnally, panel unt root test methodologes those accounts for structural breaks n the panel. Ths study employs several frst-generaton methodologes, ncludng Im, Pesaran and Shn (23) one, whch are based on the well-known ADF procedure of Dckey and Fuller (979). Im, Pesaran and Shn (IPS, 23) propose one of the most effcent methodologes for nvestgatng the presence of unt roots n panel data. It requres small tme observatons for the test to have power and the power of the test better fts to analyze long-run relatonshps n panel data (Al Mamun, 23). IPS (23) method works by specfyng a separate ADF regresson (see equaton ) for each cross-sectonal unt wth ndvdual effects and no tme trend. y t = α ρ y, t- p β y, t- ε Where, =... N and t =... T t...( ) After separate ADF regressons are estmated, the average of the t-statstcs for ρ s calculated from the ndvdual ADF regresson usng equaton 2. N t NT = tt ( pβ )...(2) N = The t-bar s then standardzed, whch converges to the standard normal dstrbuton as N and T. IPS (23) pont that t-bar test better performs when N and T are small (though ths s not the case here). The advantage of IPS (23) methodology s ts use of separate tests for the N cross-sectonal unts. However, IPS (23) proposes a slghtly dfferent verson of such test when the errors n dfferent regressons contan a common tme-specfc component. The study also apples Levn Ln Chu (LLC, 22) and Bretung (2) panel unt root tests wth common & ndvdual unt root processes Panel contegraton test Although the concept of contegraton was ntroduced by Ganger (98) followed by a seres of works n ths feld led by Engle and Granger (987) and Phllps and Oulars (99); however, Pedron (995, 997) was the frst to study the propertes of spurous regresson both n homogeneous and heterogeneous panels n testng the null of no contegraton. Eventually, the test of the null hypothess of no contegraton becomes a branch of contegraton tests. McCoskey and Kao (999) and Koa (999) develop another branch of panel contegraton tests wth the null hypothess of contegraton n ther studes. Pedron (995, 997) provdes asymptotc dstrbutons for test statstcs for heterogeneous panel; those are approprate for dfferent types of dynamcs such as endogenous regressors, fxed effects, ndvdual specfc effects, determnstc trends, etc. Pedron (997) tests permt the heterogenety of the autoregressve root under an alternatve hypothess consstent wth the dea of Im et al. (997). Panel contegraton tests can also be undertaken under a homogenety assumpton for the contegratng vectors among cross sectonal unts (Pedron, 995, 997; and Kao, 999). In addton to the heterogeneous case, Pedron (995, 997) also studed propertes for the especal case of homogeneous contegratng vectors suggestng that resdual-based tests for the null of no contegraton have asymptotcally dstrbutons 7

9 equvalent to raw panel unt root tests when regressors are exogenous. However, panel contegraton tests wth common-factor restrcton cause a sgnfcant loss of power n resdual-based methodologes (Baneree et al., 998; and Kremers et al., 992). So, Westerlund (27) develops four new panel contegraton tests aganst the null of nocontegraton. These tests are based on structural rather than resdual dynamcs; consequently they do not requre common-factor restrcton wth optmum lag and lead lengths for each seres chosen by usng the Akake Informaton crteron (AIC). Snce the varables of nterest are ntegrated at I(), the study apples the Westerlund (27) contegraton test for varables under frst-dfference wth the null of no contegraton usng equaton 3. p p ' ' ΔCO2t = dt α(co2,t β X,t ) αδco2,t γδx,t εt...(3) q Where t = tme and N s cross-sectonal unts. α are the speed adustment to equlbrum ' relatonshp n C 2, t βx, t after a sudden shock and d t s a determnstc component. A negatve and sgnfcant α suggests the presence of error correcton,.e. long run contegraton. The determnstc component could take one of three possbltes,.e., or (, t) referrng both a constant and a tme trend for consderng ndependence between x t and ε t. Furthermore, bootstrap method can be used wth a smple modfcaton of equaton 3 assumng the ndependence of error across tme and cross-sectonal unts. Thus, the null hypothess of no contegraton s α = for all, whle the alternatve hypothess depends on what s beng assumed about the homogenety of α. The group-mean tests do not g requre the α 's to be equal, whch means that H s tested aganst H : α < for at least one. Whle the panel tests assume that α are equal for all and are, therefore, desgned to test H p versus H : α = α < for all. The panel statstcs denoted as P τ and Pα, test the null hypothess of no contegraton n the panel. Agan, group mean statstcs, G τ and Gα, test the null hypothess of no contegraton aganst the alternatve that at least one cross-sectonal unt n the panel s co-ntegrated The panel dynamc approaches Johansen (995), Phlps & Hansen (99) argue that long-run relatonshps exst f varables are ntegrated at same order. Pesaran et al. (999) followng maxmum lkelhood (MLE) based estmaton, however, counter Johansen (995) by presentng the mean group (MG) and the pooled mean group (PMG) estmators, estmators those work wth better effcency even f varables are ntegrated at mxed order. Thus, the applcatons of MG or PMG estmates do not requre contegraton tests, and analyss can be performed wth unrestrcted specfcaton for the autoregressve dstrbuted lag for tme perods t =, 2,.., T and groups =, 2,, N. Snce the mxed ntegrated order amongst the varables does not affect the effcency of the estmaton; conventonal statonarty check s no longer requred, as well. Furthermore, ths model s approprate for the panels wth large N and T dmensons. Pesaran & Smth (995) MG methodology estmates the long-run parameters by averagng the long-run coeffcents of ARDL models for each cross-sectonal unt. Therefore, the test of long-run relatonshp between CO 2 emsson and economc growth along other x takes the followng form. 8

10 CO2t 2 = θ γco2, t- γgdpt γ2gdp t γ3ivat γ4avat γ5svat γ6tot γ7lnpt εt...(4) Where, the long run parameter θ for country s s N θ = θ N = and β = N N = β θ =β γ / ; whle MG estmator for panel. So, MG model estmates separate regressons for each country and then calculates parameters as unweghted means of the estmated coeffcents for the ndvdual countres wthout mposng any restrcton. Therefore, all coeffcents are allowed to be heterogeneous both n the long-run and the short-run. Gven the country-specfc heterogeneous feature n the data set, MG estmator s a ratonal methodology to use. Furthermore, the study fts wth the requrement of MG approach, as the necessary condton for the consstency and valdty of MG approach requres a suffcently large tme-seres and cross-country dmenson. The PMG estmator allows short-run coeffcents, ncludng the ntercepts and the adustment speed to the long-run equlbrum to be heterogeneous among countres. However, t restrcts the long-run slope coeffcents to be homogeneous across countres. Ths mples that θ = for all s. In order to estmate short-run and the long-run coeffcents, Pesaran et al. (999) adopt the pooled maxmum lkelhood estmaton (MLE) approach by assumng that the dsturbances ε t are normally dstrbuted. The PMG s estmated accordng to the equaton 5. p q / lnco 2, t = μ λ lnco2,t- X ε...( 5) Where, =, 2,.., N represents cross-sectonal unt, and t =, 2, 3,..,T represents tme; s the optmum tme lag, Xʹt = ndependent varables lke GDPG t, IVA t, SVA t, AVA t, TO t, lnpo t etc. and µ s the fxed effect. By re-parameterzaton, equaton 5 can be wrtten as: p * ΔlnCO2, t = μ φlnco 2,t β X t λ * ΔlnCO2,t ΔX t ε t...(6) λ Where, φ = ( * * = = p λ m m= p m m= p t λ ), β =, =,2,,..., p, and, =,2,,..., q. t p And by groupng the varables n levels, the error correcton equaton s rewrtten as:, p * ΔX t ΔlnCO 2t = μ φ (lnco2,t θ X t ) λ * ΔlnCO 2,t ε t...( 7) Where θ =-(β /φ ) defnes the long-run equlbrum relatonshp among y t and x t, whle λ * and are short-run coeffcents relatng to CO 2 to ts past values and other determnants such as * x t. The error-correcton coeffcent φ, measures the speed of adustment of CO 2,t toward ts long-run equlbrum followng a change n x t. φ < ensures that there exsts a long-run relatonshp. Therefore, a sgnfcant and negatve value for φ s an evdence of contegraton between y t and x t. Fnally, the average long run estmates are measured by the followng: 9

11 θ PMG N ~ N ~ N ~ N θ β λ γ = = = = =, βpmg = ; λ,and γ N N PMG = N PMG = N ˆ ~ Where, =,...q -, θ = θ The followng four models have been developed based upon the methodology presented n equaton 7. ΔlnCO = μ φ (lnco λ GDPG λ TO λ lnpop ) 2,t p γ 3 2,t- Δ(lnCO ΔlnPop 2 ) t,t,t,t PMG 2 ΔGDPG,t,t...(8.) 3 2,t ΔTO,t ΔlnCO 2,t = μ φ (lnco p γ Δ(lnCO 3 ΔTO 2,t- 2,t λ GDPG ) t 4,t λ ΔGDPG ΔlnPop 2 GDP,t,t 2.t,t λ 3 TO,t 2 λ 4 ΔGDPG lnpop 2,t,t...8.2) ) ΔlnCO 2,t = μ φ (lnco p 4 γ Δ(lnCO ΔT 2,t-,t λ lniva ) 2 t 5,t ΔlnPop λ lnava 2 ΔlnIVA,t,t,t,t λ lnsva 3 2,t ΔplnSVA λ TO,t...(8.3) 4 λ lnpop,t 5 3,t ) ΔlnAVA Where =,, 36 cross sectonal unts; t =, 3 tme perods; λ are parameters to be estmated and Δ s the dfferenced operator and ln s the logarthmc expresson. If the varables are I() and contegrated, then the error term s an I() process for all. A prncpal feature of contegrated varables s ther responsveness to any devaton from long-run equlbrum. Ths feature mples an error correcton model n whch the short-run dynamcs of the varables n the system are nfluenced by the devaton from equlbrum. The parameter φ s the error-correcton coeffcent or the speed of adustment term. If φ =, then there would be no evdence for a long-run relatonshp. Ths parameter s expected to be sgnfcantly negatve under the pror assumpton that the varables show a return to a longrun equlbrum. 4. Results and Dscussons We begn wth the nvestgaton of multcollnearty followng Farrar-Glauber (976) methodology. The result (table ) shows that for all varables except for GDPG n lower ncome countres, the F-test statstcs has P-values less than %. Ths provdes early evdence that there s no panel multcollnearty.e. the problem of model msspecfcaton does not exst. Inset table here Then we move to test the frst generaton unt root test under dfferent methodologes. Under IPS (23) methodology, all the varables are ntegrated at I() consderng both common and ndvdual unt root process under ndvdual ntercept and no trend (table 2). The test results also suggest that GDPG s showng ntegraton at I(), whle GDPG 2 s showng mxed order of ntegraton only under IPS (23) methodology. Under Levn, Ln & Chu (22) methodology, AVA s showng mxed order of ntegraton and IVA s showng no ntegrated order at level and n frst dfferences. TO s also showng mxed order of ntegraton under Fsher (988) methodology. Snce there exsts mxed order of ntegraton among the varables, Pesaran et al. (999) methodology s the clearly favored estmator for the study. Moreover,,t

12 the result of panel unt root test also argues for the superorty Pesaran et al. (999) over other error correcton models. Inset table 2 here Next we move to Westerlund (27) contegraton test to get an early ndcaton about the possble contegratng relatonshp n the panel data. Table 3 summarzes the result of Westerlund (27) contegraton tests. The result of the long-run contegratng relatonshp between CO 2 emssons and varous sectoral outputs suggests that the group mean statstcs does reect the null hypothess of no-contegraton at varous sgnfcance levels for every sngle regon. So, the result provdes a mxed outlook about the possble long run contegratng relatonshp between CO 2 emssons and sectoral output n low-ncome countres. Inset table 3 here At frst we determne the nature and magntude of the long-run elastctes and the short-run dynamcs between CO 2 emssons and economc growth. The result has been estmated under MG, PMG and DFE alternatves followng by Pesaran et al. (999). However, the fndngs of Hausman (978) test confrms that n most of the cases the PMG alternatve provdes more consstent, effcent and statstcally sgnfcant estmators over MG and DFE estmates for all regons (table 4 to 6). Therefore, rest of the dscussons s based on the fndngs of PMG estmates. The exstence of statstcally sgnfcant long run dynamc relatonshp requres that the error correcton coeffcent be negatve and statstcally sgnfcant. Emprcal results (tables 4 to 6) clearly confrm the exstence of long-run elastctes and short run dynamc between economc growth and CO 2 emssons for all the regons. For example, table 4 suggests that error correcton estmates ranges from -.5 to -.89 wth an average of -.36 for all dfferent economc regons. Thus, t takes approxmately 3.6 years to readust the temporal shocks n the long-run equlbrum relatonshp between CO 2 emssons and the regressors.e. GDPG, TO and lnp. However, the readustment of the temporal shocks n the dynamc lnkage s much faster (average of -.37) under equaton 8.3 that ncludes sectoral output along wth TO and lnp n the model. Furthermore, the adustment s much qucker low ncome and HIOECD countres compared to HINOECD and all mddle ncome countres. Inset table 4, 5, 6 here Both table 4 and 5 reports that CO 2 emsson s a postve functon of economc growth and populaton sze n the long-run. Ths fndng s broadly consstent wth the fndngs of the maorty of the earler studes (see Moomaw and Unruh, 997; Galeott and Lanza, 23; Apergs and Payne, 29; Lean and Smyth, 2; and Jaunky, 2). One would generally perceve that the rate of CO 2 emsson due to GDPG or sectoral output wll be much hgher n case of low-ncome countres wth mserable and unsophstcated prmtve productve technology, ptable knowledge about the negatve effect of envronmental degradaton, low envronmental regulatons and standards, poor and lack of transparent envronmental watchdog, etc. However, a frst hand peep on the results (table 4 to 5) shows an nterestng pattern about such dynamc lnkage. Though, GDPG exerts a statstcally sgnfcant postve mpact on CO 2 emsson across dfferent economc regons, nterestngly; the long-run elastcty of GDPG s much hgher n upper mddle ncome and hgh-ncome countres compared to low-ncome countres. Why such unexpected, but mmensely robust fndngs do we confront? Can we, therefore, argue that, compared to hgh-ncome countres, low ncome have acheved far more envronmentally effcent economc growth over the years? Indeed,

13 the most scentfc answer to ths compellng queston needs a bunch of future research n ths drecton. However, the general economc ratonalsm suggests that hgh-ncome countres mostly rely on the ndustral and servce sectors n augmentng ther economc growth. Evdently, these sectors do consume more energy ether drectly or ndrectly, whch generates hgher CO 2 emsson. Furthermore, energy consumpton level s dsproportonate between hgh ncome and low-ncome countres wth hgh-ncome countres consumng lon share of the energy of the world. Trade openness generally exhbts negatve mpact on CO 2 emsson n most of the regons; however, the result s statstcally sgnfcant n low ncome and hgh ncome OECD countres. Moreover, such mpact s slghtly hgher n low ncome countres compared to hgh ncome countres. Thus, nternatonal trade has not only brought economc development to the world, but also resulted n a more envronment frendly economc growth. Ths s because nternatonal trade requres the tradng natons, especally low ncome countres, to abde by some very rgorous and standardzed envronmental practces n the manufacturng process to qualfy for export to hgh-ncome countres. Fnally, the mpact of populaton on CO 2 emsson s qute nconsstent across regons under dfferent models. Intally under Eq. 8. populaton generally shows a statstcally sgnfcant postve mpact on CO 2 emsson across regons. However, such mpact s relatvely hgher n case of upper mddle and hgh ncome non-oecd countres compared to low ncome and hgh ncome OECD countres. However, once we nclude GDPG 2 n the model, ths parameter becomes negatve and statstcally sgnfcant for all mddle ncome countres. Furthermore, ncorporaton of sectoral output varables n the model changes the sgn for the parameters of populaton sze n hgh ncome countres, as well. After generalzng the result of the mpact of GDPG on CO 2 emsson across regons, now we answer f ncreasng economc growth s an endless motvaton to strve. The results (table 5) clearly suggest the exstence of EKC wth a coeffcent of GDPG 2 beng negatve and sgnfcant whle the coeffcent of GDPG s postve and statstcally sgnfcant across regons except for HIOECD countres. The presence of EKC could not be conclusvely supported for HIOECD countres because the coeffcent of GGDG though s postve and statstcally sgnfcant; however, the estmated parameter of GDPG 2 s negatve but statstcally nsgnfcant. Ths s a robust fndng and s n contrast to many emprcal fndngs ncludng (Han & Lee, 23), whch report a sgnfcant declne n the dependence of economc growth on polluton. Ths result concludes that n general a harmonous coexstence of economc growth and envronmental conservaton s possble for countres around the world. Fnally, we focus on the key research gap addressed n ths paper.e. understandng the regonal dfferences on the relatve contrbuton of dfferent sector's outputs on CO 2 emsson. The PMG result (table 6) shows that the ndustral sector output, as expected, has a statstcally sgnfcant postvely nfluences the level of CO 2 emsson n all dfferent regons. So, the general dea about the negatve envronmental effect of ndustralzaton s unequvocally confrmed across regons. Besdes, hgher ndustralzaton has led to relatvely hgher level of CO 2 emsson n hgh-ncome non-oecd and upper mddle ncome countres compared to hgh ncome OECD, lower mddle ncome, and low ncome countres. Interestngly, the coeffcent of ndustral output s relatvely much hgher n case of hgh ncome non-oecd countres compared to OECD countres. Ths clearly ndcates the dfferences between these regons n term of the qualty of economc output produced. 2

14 Further nvestgaton about the contrbuton of dfferent sectors n CO 2 emsson (table 6) reveals some robust conclusons. The long-run mpact of the servce sector output on CO 2 emsson across regons generally confrms that the shft from the ndustral economy to servce economy over the years s not a welcomng aspect of economc transformaton n the hgh ncome countres. However, such transformaton has led to a lower level of CO 2 emsson n mddle and low ncome countres. Ths s a sgnfcant fndng. Servce sector output exhbts a statstcally sgnfcant postve coeffcent of.2 and.8 for HINOECD countres and HIOECD countres respectvely whle statstcally negatve coeffcent of -.2 and -.4 for low ncome and lower mddle ncome countres respectvely. Fnally, the contrbuton of the agrculture output n CO 2 emsson s not conclusve across all regons. However, the contrbuton of the agrculture output n CO 2 emsson s postve and statstcally sgnfcant for low ncome (.2), lower mddle ncome (.) and hgh ncome OECD (.) countres. The result probably sgnfes that, n hgh-ncome OECD and lower mddle ncome countres usually use more technologes, toxc, and nsectcdes n the producton of agrculture output whch ncreases CO 2 emsson per unt of agrculture output. Interestngly, though the low ncome countres stll depend heavly on prmtve agrculture technologes and logstcs whch reduce the level of CO 2 emsson; however, n recent years there s sgnfcant ncrease n the use of pestcdes n these countres as well. A comparatve analyss of the overall result reveals that servce output parameters for hgh ncome countres are much hgher compared to ndustral and agrculture output parameters. Therefore, the ncreasng contrbuton of servce output n these countres economc growth s emttng more CO 2 compared to ndustral and agrculture output. Ths fndng s consstent wth the fndngs of World Bank (2). Addtonally, Alcántara and Padlla (29) argue that varous parts of servce sectors are ncreasngly emttng more CO 2 compared to other sectors of the economy. In fact, transportaton sector, one of the maor sub-sectors of the servce sector, s responsble for a large degree of CO 2 emsson. Due to the strong pull effect of servce actvtes on other actvtes of the economy, the drect and ndrect effect of servce output n CO 2 emsson s hghly ncreasng. Wth regard to the short run margnal effect, there s a sgnfcant varaton across regons n the estmated coeffcents under varous models wthout any general pattern except n few nstances (table 4 to 6). Results of PMG estmates (table 4) suggest that the mpact of GDPG s generally negatve for most of the regons except for HINOECD courters. However, the results are statstcally sgnfcant for mddle ncome (-.) and HINOECD (.) countres. Ths ndcates that GDP growth rate sgnfcantly reduces the CO 2 emsson n mddle ncome countres, whle ncreases emsson n the HINOECD countres n the long run. Table 4 also shows that TO ncreases the level of CO 2 emsson for low ncome and lower mddle ncome countres, whle reduces the emsson n HINOECD countres even n the short-run contractng the fndngs for long-run. The result possbly ndcates that TO exert ts mmedate postve effect on output growth by openng up the avenues of nternatonal market opportuntes for low ncome countres, and ths has lead to ncrease n CO 2 emsson the short-run. However, adopton of better technologes or strngent gudelnes on envronmental standard n the long-run may wnd out such effect n the long-run. Moreover, sze of the populaton does not exert any statstcally sgnfcant nfluence on CO 2 emsson n the short-run. Fnally, the results of short-run mpact of sectoral output (table 6) suggest that except the short run sgnfcant mpact of the ndustral output on CO 2 emsson n HIOECD countres, the overall short-run coeffcents of sectoral outputs are statstcally nsgnfcant for all other regons. Therefore, t can be concluded that, sectoral outputs do not have any short term mpact on CO 2 emsson across the world. 3

15 5. Concluson and Polcy Implcatons The am of ths paper s to examne the relatonshp between CO 2 emssons and economc growth across the world for perod. The current study has hghlghted several nterestng fndngs. Frst, n contrast to exstng publc percepton, hgh-ncome countres are emttng more CO 2 per % ncrease n output. Second, ndustral output ncreases the level of CO 2 emsson across the world. Whle, servce output ncreases more CO 2 emsson compared to ndustral and agrculture output n hgh ncome countres n the long-run. Therefore, there s a maor anomaly n the way the transformaton n hgh ncome countres towards servce orented economy has been worked out. However, servce output reduces the level of CO 2 emsson for low ncome and lower mddle ncome countres ndcatng that such transformaton has benefted these countres. Fourth, there s a clear presence of EKC across regons except for hgh-ncome OECD countres. Fnally, economc lberalzaton has generally reduced the level of CO 2 emsson, whle sze of the populaton ncreased the level of CO 2 emsson across regons n the long-run. The overall fndngs of the study offer some serous polcy mplcatons n reducng CO 2 emsson across the world. Snce hgh-ncome countres generate more CO 2 emsson per % growth n GDP, the current levels of envronmental conservatsm efforts by these countres are clearly not suffcent. In fact, gven ther economc sze and level of ther prosperty, these countres should channel more resources and logstcs to mnmze CO 2 emsson n augmentng ther output growth. The dea of puttng hgher green tax on output n these countres can be one of the approprate mechansms to reduce the overall CO 2 emsson across the world. Furthermore, n strct envronmental conservaton sense, these countres should reduce ther output f they contnue to fal n reducng the level of CO 2 emsson ntensty snce there are other countres producng smlar output wth less CO 2 emsson. Snce servce sector emts the hghest level of CO 2 n hgh ncome countres, strategy to reduce CO 2 must consder a wder understandng of the servce sector, an understandng that consder wholesale and retal trade, transportaton, real estate, hotels and restaurants, the toursm ndustry and other servce sub-sectors. Alcántara and Padlla, (29) argue that these servce sub-sectors are notably responsble for a sgnfcant ncrease n emssons experenced durng recent years. O Mahony et al. (22) also argue that an ncrease n the ntensty of the transport sector contrbutes to a sgnfcant ncrease n emssons. But these servces receved very lttle attenton durng the desgn of polces amed at reducng emssons. Despte the presence of EKC for LIC, LMIC, UMIC, and HINOECD countres, snce, the parameter of GDPG s much hgher than the parameters of GDPG 2, an ncrease n GDPG wll have very slow mpact on the reducton of CO 2 emsson n the long run. Therefore, the ongong effort to reduce CO 2 emsson s not gong to be very effectve gven the level of the challenge. The recent study of Intergovernmental Panel on Clmate Change (23) has clearly hghlghted the ntensty of the concern. Thus we need an ntense and swft global effort to augment technologcal breakthrough for achevng envronmental frendly and economcally effcent output n the future. Muradov and Vezroglu (28) argue that to satsfy the world s growng appette for energy and keep our planet healthy; at least TW (or terawatt) of carbon-free power has to be produced by md-century. However, the level of technologcal breakthrough acheved so far to ths end has not been so successful yet. So, carbon-negatve system for producton of synthetc fuels wth sequestraton of sold carbon can be an mportant alternatve to clean up bllon tons of CO 2 from the Earth s atmosphere. Lvng n ths age of a hydrocarbon economy, the development and mplementaton of new CO 2 -free 4

16 routes to hydrogen producton from NG and other hydrocarbons wth recovery of sold carbon product may present an envronmentally safe alternatve to CO 2 sequestraton. Furthermore, any technology that can recycle the bllons of tons of CO 2 nto renewable energy wll be an mportant breakthrough to ths end. The global communty should put serous effort n augmentng a break-through technology, a technology that proves the dea of growth and envronmental balance a very much realzable publc good. Snce the sze of the populaton s one of the most mportant varables contrbutng to CO 2 emsson across regons; therefore, populaton control can be consdered an effectve mechansm to deal wth the ncreasng problem of CO 2 emsson. However, such soluton s pretty shallow consderng emprcal fndngs (Smon, 98; D.Gale Johnson, 999; Fumtaka Furuoka, 29; Dyson, 2; Fumtaka Furuoka and Qaser Munr, 2, Mnh Quang Dao, 22; etc.) about the postve and sgnfcant effect of populaton sze on economc growth n countres lke Chna, Inda, Indonesa, Turkey, and Brazl, etc. Therefore, ncreasng the knowledge base of economc agents about savng energy and negatve effect of greenhouse gas, practcng more energy-effcent lvng can also play a crucal role n mnmzng CO 2 emssons. Recent studes by Lopes et al. (22), Mkko et al. (22), Ncola et al. (22), Bradford et al. (22), Anas et al. (22), Tng et al. (23), Chrs et al. (23), Drk et al. (23), Jllan et al. (23), etc. are encouragng effort n craftng a comprehensve polcy to acheve more energy effcency leadng to low carbon economes. Fnally, as trade openness mnmzes CO 2 emsson, focus on ncorporatng rgorous envronmental standard n the blateral and multlateral trade and nvestment agreement should be duly prortzed. 5

17 References. Acaravc, A., Ozturk, I. On the Relatonshp between Energy Consumpton, CO2 Emssons and Economc Growth n Europe. Energy2; 35(2): Agras, J., Chapman, D. A dynamc approach to the envronmental Kuznets curve hypothess. Ecologcal Economcs 999; 28: Akbostanc, E., S. Turut-Ask and G. Tunc. The relatonshp between ncome and envronment n Turkey: Is there an envronmental Kuznets curve?. Energy Polcy 29; 37: Alam J Mohammad, Begum I. Ara, Buysse Jeroen and Huylenbroeck Gudo Van. Energy consumpton, carbon emssons and economc growth nexus n Bangladesh: Contegraton and dynamc causalty analyss. Energy Polcy 22; 45: Al Mamun Md., Ma Hannan A. Fscal polcy determnants of Bangladesh Economc growth: An econometrc analyss. IJAR-BAE 22;(2); Al Mamun Md. The effect of macroeconomc & market specfc dynamcs on stock market development n global growth generator countres. Asan Economc and Fnancal Revew 23; 3(9): Alcántara, V. Padlla, E. Input output subsystems and polluton: applcaton to the servce n Span. Ecologcal Economcs 28; 68(3): Al-Mulal, U., Lee, J.Y.M., Mohammed, A.H., Sheau-Tng, L. Examnng the lnk between energy consumpton, carbon doxde emsson, and economc growth n Latn Amerca and the Carbbean. Renewable and Sustanable Energy Revews 23; 26: Anas Zyadn, Antero Puhakka, Prkkolsa Ahponen, Tara Cronberg, Paavo Pelkonen. School students knowledge, perceptons, and atttudes toward renewable energy n Jordan. Renewable Energy 22; 45: Apergs, N., Payne, J. E. CO2 emssons energy usage and output n Central Amerca. Energy Polcy 29; 37: Arour, M-E., Youssef, A., M henn, H., Rault, C. Energy consumpton, economc growth and CO2 emssons n Mddle East and North Afrcan countres. Energy Polcy 22; 45: Asafu-Adaye, J. Bodversty loss and economc growth: a cross-country analyss. Contemporary Economc Polcy 23; 2(2): Aqeel, A., Butt, M. S. The relatonshp between energy consumpton and economc growth n Pakstan. Asa Pacfc Development Journal 2; 8: Asafu-Adaye, J.The relatonshp between energy consumpton, energy prces and economc growth: Tme seres evdence from Asan developng countres. Energy Economcs 2; 22: Azomahou, T., Lasney, F. & Van, P. N. Economc development and CO 2 emssons: A nonparametrc panel approach. Journal of Publc Economcs 26; 9: Baek, J., Km, H-S. Is economc growth good or bad for the envronment? Emprcal evdence from Korea. Energy Economcs 23; 36: Ba, J. & S. Ng. A panc attack on unt roots and contegraton. Econometrca 24; 72: Baneree, A., J. Dolado and R. Mestre. Error-Correcton mechansm tests for contegraton n a sngle-equaton framework. Journal of Tme Seres Analyss 998; 9, Bloch. Harry, R. Shuddhasattwa & S. Ruhul. Coal consumpton, CO 2 emsson and economc growth n Chna: Emprcal evdence and polcy responses. Energy Economcs 22; 34:

18 2. Borhan H, A. Elsadg Musa & H. Mzan Proceda. The Impact of CO 2 on Economc Growth n ASEAN 8. Journal of Asan Behavoral Studes 23; 3(8): Bradford Mlls, Joachm Schlech. Resdental energy-effcent technology adopton, energy conservaton, knowledge, and atttudes: An analyss of European countres. Energy Polcy 22; 49: Bretung, J. The local power of some unt root tests for panel data. Advances n econometrcs Non-statonary Panels, Panel Contegraton, and Dynamc Panels, Amsterdam: JAY Press Cho I. Combnaton unt root tests for cross-sectonally correlated panels. In D Corbae, SN Durlauf, BE Hansen (eds.), Econometrcs Theory and Practce: Fronters of Analyss and Appled Research 26; chapter 2: 3:333. Cambrdge Unversty Press, Cambrdge. 24. Cho, E., Heshmat, A and Cho, Y. An Emprcal Study of the Relatonshp between CO 2 Emssons, Economc Growth and Openness, IZA DP 2: No Chrs von Borgstede, Mara Andersson, Flp Johnsson. Publc atttudes to clmate change and carbon mtgaton Implcatons for energy-assocated behavors. Energy Polcy 23; 57: Cole, M. A., Rayner, A.J., Bates, J. M. The envronmental Kuznets curve: An emprcal analyss. Envronment and Development Economcs 997; 2: Coondoo, D., Dnda, S. The carbon doxde emsson and ncome: a temporal analyss of cross-country dstrbutonal patterns. Ecologcal Economcs 28; 65: D.Gale Johnson. Populaton and economc development. Chna Economc Revew 999; (): Dean, J.M. Testng the mpact of trade lberalzaton on the envronment: Theory and evdence. Canadan Journal of Economcs 22; 35 (4): Dean, J.M. and Lovely, M.E. Trade growth, producton fragmentaton, and Chna s envronment. NBER Workng Paper 28; De Bruyn, S., Van den Bergh, J., Opschoor, J. Economc growth and emssons: reconsderng the emprcal bass of envronmental Kuznets curves. Ecologcal Economcs 998; 25: Dckey, D.A. and W.A. Fuller. Dstrbuton of the estmators for autoregressve tme seres wth unt root. Journal of the Amercan Statstcal Assocaton 979; 74: Dnda, S., and D. Coondoo. Income and Emsson: A Panel Data-Based Contegraton Analyss. Ecologcal Economcs 26; 57(2): Drk Brounen, Nls Kok, John M. Qugley. Energy lteracy, awareness, and conservaton behavor of resdental households. Energy Economcs 23; 38: Dyson, T. Populaton and Development: The Demographc Transton 2; New York, NY: Zed Books. 36. Essen, Anete Vncent. An emprcal analyss of energy consumpton, CO2 emssons and economc growth: The Ngeran case: Avalable at SSRN: or Farrar, D. and Glauber, R. Multcollnearty n regresson analyss the problem revsted. Revew of Economcs and Statstcs 976; 49: Fredl, B., Getzner, M. Determnants of CO 2 emssons n a small open economy. Ecologcal Economcs 23; 45: Fumtaka Furuoka. Populaton Growth and Economc Development: New Emprcal Evdence from Thaland. Economc Bulletn 29; 29(): Fumtaka Furuoka and Qaser Munr. Can populaton growth contrbute to economc development? New evdence from Sngapore. Economcs Bulletn 2; 3(4):