How economic growth in Australia reacts to CO2 emissions, fossil fuels and renewable energy consumption
International Journal of Energy Sector Management
ISSN: 1750-6220
Article publication date: 6 September 2018
Issue publication date: 23 October 2018
Abstract
Purpose
Australia is one of the ten largest emitters of greenhouse gases but stands out from the others due to its economic growth without recession for 26 consecutive years. This paper aims to focus on the energy-growth nexus and the effects of energy consumption on the environment in Australia.
Design/methodology/approach
This analysis is performed using annual data from 1965 to 2015 and the autoregressive distributed lag model.
Findings
The paper finds empirical evidence of a trade-off between economic growth and carbon dioxide (CO2) intensity. The results show that increased gross domestic product (GDP) in Australia increased investment in renewable energy sources (RESs), although the renewable technology is limited and has no impact on reducing CO2 intensity in the long run. In contrast to investment in RES, fossil fuels, coal and oil, are decreased by GDP. However, oil consumption increased renewable energy consumption, and this reflects the pervading effect of the growing economy.
Originality/value
Overall, this paper contributes to the literature by analysing the behaviour of both energy consumption and the environment on the growing Australian economy. In addition, this paper goes further by studying the impact of economic growth on renewable and non-renewable energy consumption, as well as on CO2 emissions. The study is conducted on a single country for which literature is scarce, using a recent approach and a long time period.
Keywords
Acknowledgements
The authors would like to express their thanks for the opportunity to present a previous version of this paper at the 2nd AIEEE Energy Symposium and at the 1st International Conference on Energy, Finance and the Macroeconomy, 2017 (ICEFM, 2017). The comments and suggestions received were very useful. The authors gratefully acknowledge the generous financial support of the NECE-UBI – Research Unit in Business Science and Economics, Project no. UID/GES/04630/2013 – sponsored by the Portuguese Foundation for the Development of Science and Technology. The authors are also grateful for the anonymous reviewers for their helpful and invaluable comments and suggestions.
Citation
Leal, P.H., Marques, A.C. and Fuinhas, J.A. (2018), "How economic growth in Australia reacts to CO2 emissions, fossil fuels and renewable energy consumption", International Journal of Energy Sector Management, Vol. 12 No. 4, pp. 696-713. https://doi.org/10.1108/IJESM-01-2018-0020
Publisher
:Emerald Publishing Limited
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