The Role of Energy Use and Economic Growth on Environmental Degradation: Evidence from Selected Asian Countries

Abstract

This study aims to drive the relationship between energy use and economic growth in selected Asian countries by evaluating the effect of energy use, gross domestic products, agriculture exports, land under cereal production, and carbon dioxide. This estimation uses Asian countries' data to elaborate on the relationship between CO2, GDP, electricity consumption, land under cereal production, and exports of agricultural crops highly related to the production of output or exports. These variables impact the environment and production of any country. The unit root test is used to estimate data using the ARDL model to find the stationary data. Hausman and F-Test apply for autocorrelation by using different tests like the HAC test to adjust correlation and multi-collinearity between the variables. The brush-Pagan test also tells us to know which estimation is better between Pooled OLS and FEM (Fix effect model). Hausman tests are used for the selection of which model is best or fit for estimation between FEM and REM. On the other side, F-Test applies to the understanding of model estimation of fit model for estimation of data between FEM and Pooled OLS model. Breusch-Pagan LM is applied to select models between the pooled OLS model and REM. Results show that the Asian countries' GDP is positively and significantly related to CO2 emission. The results of the use of energy show a positive and significant impact on economic growth, but it has an inverse effect on CO2. Result shown that relation between CO2 and GDP are impacted the country’s output production and use of energy over the time increasing. Land under cereal production has also the positive relation with CO2 over the time in Asian countries. The second model has shown some different results if we are using GDP as explained variable and other variable are us as explanatory variables. GDP and use of energy between inverse relations. That shows that if a country's output increases due to energy use, it falls over time in Asian countries.