Carbon Dioxide Emission, Energy Consumption, Economic Growth, Population, Poverty and Forest Area: Evidence from Panel Data Analysis

Abstract

This paper investigated the impact of energy consumption, economic growth, population, poverty, and forest area on carbon dioxide (CO2) emissions by using the econometrics approaches for Malaysia, Indonesia and Thailand. In this paper, it involved time series data over the period of 20 years from 1991 to 2010. There were several tests that had conducted which involved Panel unit root test, cointegration test, Granger causality test. From the empirical result, we found that the variables had more than one panel unit root tests. Cointegration test also showed that there was at least four cointegrating equation exist in the variables. For the Granger causality test, there was only poverty had unidirectional relationship with CO2 emission, while the other variables were independent to the CO2 emission. Testing approach showed that energy consumption and economic growth had positive relationship with CO2 emission. On the other hand, population growth rate had a little impact on CO2 emission. However, poverty and forest area had negative relationship with the CO2 emission. Thus, the economy substantially would try to tend to develop renewable energy and energy efficient to minimize the CO2 emissions in order to enhance the long-run economic growth in Malaysia, Indonesia and Thailand.Keywords: Energy consumption, Economic growth, Carbon dioxide emissions, Population, Poverty, and Forest area.JEL Classifications: C33, O13, Q43