Relationship between energy consumption and economic development

According to the MGE results shown in Table VIII and obtained for each unit of the lower-middle-income economies, the error correction parameter is statistically significant and negative for all countries, except for Bangladesh, Georgia and Senegal. The increased energy costs along with the strategic goals undertaken globally in the area of air pollution reduction have contributed to a more elaborated study of the links between renewable energy consumption and the economic growth. From the methodological point of view, there are recent attempts to include indicators of environmental quality in the overall concept of competitiveness at country level. Their transition to market economy started with a common scheme applied for all—the neo-liberal Washington Consensus model with main measures including economic liberalization, privatization and the implementation of structural reforms. Thus, the energy has an important role in achieving the sustainable development objective of EU economies [ 13 ]. In addition to the long-run parameters, estimation of short-run parameters also gives some valuable information. Central Asian Information, 7: 36— Stern, N.

Therefore, the error-correction-based panel cointegration test developed by Westerlundwhich takes account of cross-section dependence, will be used in this study to test for cointegration between the panel data variables.

However, the curiosity of economists — and development economists in particular — was not roused until the emergence of the ecology debate in the US in the s and s.

As a result they initially had to face high social costs followed by a fast macrostabilisation and a relaunch of economic growth. It benefits from relatively abundant and low-cost energy obtained from fossil fuels, namely oil, natural gas and coal, and, to a much lesser degree, fissile fuels such as uranium.

In order to avoid wasting this unique and relatively short-lived opportunity to fight poverty and boost development, they must first be able to negotiate good deals that will allow them to generate sufficient revenues in exchange for the depletion of their natural capital.

Even more surprising is the fact that the marked differences between individual donors do not mirror the divide between those countries that are climate policy pioneers or laggards. For Hungary [ 59 ] proposed an optimization of the action plan aimed to ensure the use of renewable energy taking into account the energy needs and the potential of this country.

Relationship between energy and economic growth

Nadeau, R. This conclusion was confirmed by [ 38 ] for a group of emerging economies and by [ 39 ] for 80 economies during the period — It is the main source of fuels for continental and maritime transport and the only source for aviation. In all probability, the energy crisis looks set to provoke shocks of much greater severity before key decision-makers eventually take appropriate action. Besides, the long-term parameters of the energy consumption variable in the model were found to be significant and positive for all groups, which is a result consistent with a priori expectations. Veblen, T. Despite the fears surrounding the nuclear arms race and the risks of proliferation after the start of the Cold War, nuclear power was seen as a new source of abundant, cheap energy, which would offer a solution to the increasing scarcity of fossil energies. This rate was 64 per cent for countries with import dependence less than 50 per cent and 74 per cent for countries with import dependence greater than 50 per cent. Thus, The Global Competitivity Report — [ 14 ] proposes the adjustment of the Global Competitivity Index by a factor related to social inclusion and another factor related to the protection of the environment -social sustainability adjusted Global Competitivity Index and environmental sustainability Global Competitivity Index. Therefore, validating this hypothesis implies that policies which seek to reduce energy consumption in order to decrease greenhouse gas pollution effects will not negatively affect domestic output. The resulting competition pushes extractive industries in ever more remote regions that have been relatively under-explored so far, notably in Sub-Saharan Africa and the Amazonian Basin as far as conventional oil and gas are concerned. The rise of global ecology 23Owing to its central role in the modern economy, energy lies at the heart of the gulf that, depending on different points of view, either separates or establishes a new interdisciplinary dialogue between the fields of social sciences and natural sciences. Therefore, government should ensure reliable and sustainable supply of energy at appropriate costs and in an environmentally friendly manner, to the various sectors of the economy for national development.

According to the MGE results obtained for each unit of the low-income economies, the error correction parameter is statistically significant and negative.

It remains to be seen whether the pledge made by the delegates to the Group of 20 G Pittsburgh summit innamely to abolish in the medium term all subsidies which encourage energy waste, will be borne out in reality.

on the relationship between energy and gnp

Accordingly, we believe that the findings of this study make a significant contribution to the efforts of policy makers and market participants, as they seek to achieve steady and sustainable growth by means of determining whether energy consumption affects economic growth and, if so, the extent of this effect.

Also [ 41 ] recommended that EU decision makers should make further progress in reducing non-renewable energy and developing other sources of the energy, because the alternative sources will boost the economic growth.

Brugger and J. The error correction parameter represents the adjustment speed of the short-run deviations caused by the nonstationarity of the series to equilibrium in the next period. The fight against extreme poverty and malnutrition calls for resolute action to combat these inequalities.

In other words, a 1 per cent increase in energy consumption increases the GDP per capita by 0. Kempf, H. We used the variables included in the Table A in S1 Archive to characterize the economic growth and relevant energy features in the CEE countries. Source: World Bank, References Auty, R. Besides, the long-term parameters of the energy consumption variable in the model were found to be significant and positive for all groups, which is a result consistent with a priori expectations. The rise of global ecology 23Owing to its central role in the modern economy, energy lies at the heart of the gulf that, depending on different points of view, either separates or establishes a new interdisciplinary dialogue between the fields of social sciences and natural sciences. Other researchers [ 46 ] applied ARDL methodology to a sample of 28 states to analyze the short run and long run relationship between energy consumption and economic growth underlining that renewable energy had no impact on economic growth while non-renewable energy had influenced that process. The relationship between energy consumption and economic growth is becoming increasingly close. Conclusions Energy is a key input that is used in all phases of production and an important resource consumed as an output for increasing the welfare level of societies. City Planning Review, 31 3 : 64— Headrick, D. It has become the common goal of countries worldwide to address climate change, reduce carbon dioxide emissions, and implement sustainable development strategies. The authors [ 26 ] reviewed the literature concluding that most studies have validated a feedback hypothesis, which is a support to investments in alternative energy field. Other authors [ 35 ] replaced the economic growth with the development level of the economies surveyed to better capture the impact of production from renewable sources.
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Energy and Development