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A multivariate time series analysis of energy consumption, real output and pollutant emissions in a developing economy: new evidence from Nepal


Nepal, R and Paija, N, A multivariate time series analysis of energy consumption, real output and pollutant emissions in a developing economy: new evidence from Nepal, Economic Modelling, 77 pp. 164-173. ISSN 0264-9993 (2019) [Refereed Article]

Copyright Statement

2018 Elsevier B.V. All rights reserved.

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DOI: doi:10.1016/j.econmod.2018.05.023


Mountain economies will have to play a central role in attaining the global pursuit of green economic growth as crucial bearers of ecosystems goods and services. However, these economies are not adequately represented in the development policy debates in spite of their fundamental importance towards global sustainable development. This study examines the inter relationships between energy consumption, output and carbon emissions in a developing mountainous economy using an augmented Vector Autoregression model. Time-series data over the period 19752013 is studied applying a multivariate framework using population and gross fixed capital formation as additional variables for Nepal. Testing for Granger causality between integrated variables based on asymptotic theory reveals a long-run unidirectional Granger causality running from GDP to energy consumption, and a unidirectional Granger causality running from carbon emissions to GDP. We suggest that the government of Nepal can address energy poverty by accelerating the adoption energy conservation policies such as rationing energy consumption and energy efficiency improvements to narrow the energy supply-demand gap. The opportunity to promote the uptake of decentralised off-grid renewable technologies in remote areas and the large scale development of hydropower at the national level also needs to be prioritized. Our results remain robust across different estimators and contributes to an emerging literature on the nexus relationships between energy consumption, income and carbon emissions in mountainous developing economies.

Item Details

Item Type:Refereed Article
Keywords:economic growth, granger causality, energy consumption, carbon emissions, mountain economies
Research Division:Economics
Research Group:Applied economics
Research Field:Environment and resource economics
Objective Division:Economic Framework
Objective Group:Other economic framework
Objective Field:Ecological economics
UTAS Author:Nepal, R (Dr Rabindra Nepal)
ID Code:131188
Year Published:2019
Web of Science® Times Cited:12
Deposited By:TSBE
Deposited On:2019-03-06
Last Modified:2020-07-29

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