Energy Consumption And Economic Growth New Insights Into The Cointegration Relationship

This paper examines the long-run relationship between energy consumption and real GDP, including energy prices, for 25 OECD countries from 1981 to 2007. The distinction between common factors and idiosyncratic components using principal component analysis allows to distinguish between developments on an international and a national level as drivers of the long-run relationship. Indeed, cointegration between the common components of the underlying variables indicates that international developments dominate the long-run relationship between energy consumption and real GDP. Furthermore, the results suggest that energy consumption is price-inelastic. Causality tests indicate the presence of a bi-directional.

Unravelling the intricate relationship between economic development and energy consumption, this book proposes an innovative framework for the empirical investigation of the link between the economy and natural resources. It proposes a novel set of indicators to shed light on those aspects of the economic process and development that determine their requirements in terms of natural resources. Employing updated databases, this book presents tables and diagrams to compare the conventional and the new estimates of the linkage between energy and economic development (Energy Intensity) throughout the world, over the last 100 years. Whereas estimates based on the established framework for evaluating the link between energy resources and the economy indicate a strong decoupling trend, the new indicators follow substantially different paths which suggest a strong coupling between economic growth and energy use. These differences -which call into question the prevailing opinion of decoupling- are fundamental for the prospects of sustainability. This book provides a valuable resource for economists, energy and environmental analysts, natural resource managers and policy makers. It is also intended for students of ecological economics, sustainability studies, natural resource and energy economics.

This issue brings together a collection of papers that provide economic insights into the modern energy market, which is still dominated by crude oil but has expanded to incorporate new energy sources in the form of coal, natural gas, and a mixture of renewable energy sources. Given the differences in the dynamics at play with different energy sources, particularly in relation to price determination, the impact they have on the environment, their importance in the energy mix and energy policy, and so forth, it has become imperative to check their behavior using economic models. Papers 1–3 provide some perspective on oil price determination by focusing on the time-varying nature of supply shocks linked to oil producers (Paper 1), OPEC’s announcements (2), and the heterogeneous interconnections of supply or demand shocks over time horizons and different countries (3). Papers 4–6 compare different energy sources within the energy market and other markets (4); explore the importance of energy storage in the electricity market (5); and examine the dynamic relationship between prices of substitutes (oil price) on the natural gas market in China (6). The final four studies examine the impact of renewable and nonrenewable energy on the macroeconomy and the environment.

Energy and food are the major concerns of most of the developing countries including India, because most of its population (57%) depends on agriculture, which contributes 14.5 per cent to the Gross Domestic Product (GDP) of the country in 2010-11 (Economic Survey 2011-12). India has made a considerable progress in increasing agricultural production and productivity due to the introduction of high yielding varieties, intensive cropping system and increased usage of energy sources like chemicals, fertilizers and high level of mechanization. Agriculture today demands a lot of fossil fuels due to its intensification and market orientation. It demands energy not only directly for its operations but also indirectly for the manufacture of inputs like fertilizers, pesticides and machinery and implements. The productivity of farms depends greatly on the availability and judicious use of farm power by the farmers. Agricultural implements and machines enable the farmers to employ the power judiciously for production purposes. Agricultural machines increase productivity of land and labour by meeting timeliness of farm operations and increase work output per unit time. Besides, its paramount contribution to the multiple cropping and diversification of agriculture, mechanization also enables efficient utilization of inputs such as seeds, fertilizers and irrigation water. Energy consumption is a engine of economic growth in Indian agriculture many energy policies and inventions in India are designed for the needs of industry, transport and urban infrastructure, whilst agricultural energy requirements are frequently overlooked. Although agriculture contributes significantly to economic and social development, energy provision in agriculture has not received the attention the sector deserves. Energy for agriculture needs to have a higher priority in rural policy and technology assessment work in India.

The Economics and Econometrics of the Energy-Growth Nexus recognizes that research in the energy-growth nexus field is heterogeneous and controversial. To make studies in the field as comparable as possible, chapters cover aggregate energy and disaggregate energy consumption and single country and multiple country analysis. As a foundational resource that helps researchers answer fundamental questions about their energy-growth projects, it combines theory and practice to classify and summarize the literature and explain the econometrics of the energy-growth nexus. The book provides order and guidance, enabling researchers to feel confident that they are adhering to widely accepted assumptions and procedures. Provides guidance about selecting and implementing econometric tools and interpreting empirical findings Equips researchers to get clearer pictures of the most robust relationships between variables Covers up-to-date empirical and econometric methods Combines theory and practice to classify and summarize the literature and explain the econometrics of the energy-growth nexus

Power to the People examines the varied but interconnected relationships between energy consumption and economic development in Europe over the last five centuries. It describes how the traditional energy economy of medieval and early modern Europe was marked by stable or falling per capita energy consumption, and how the First Industrial Revolution in the eighteenth century--fueled by coal and steam engines--redrew the economic, social, and geopolitical map of Europe and the world. The Second Industrial Revolution continued this energy expansion and social transformation through the use of oil and electricity, but after 1970 Europe entered a new stage in which energy consumption has stabilized. This book challenges the view that the outsourcing of heavy industry overseas is the cause, arguing that a Third Industrial Revolution driven by new information and communication technologies has played a major stabilizing role. Power to the People offers new perspectives on the challenges posed today by climate change and peak oil, demonstrating that although the path of modern economic development has vastly increased our energy use, it has not been a story of ever-rising and continuous consumption. The book sheds light on the often lengthy and complex changes needed for new energy systems to emerge, the role of energy resources in economic growth, and the importance of energy efficiency in promoting growth and reducing future energy demand.

The Extended Energy-Growth Nexus: Theory and Empirical Applications advances the established bivariate econometric relationship which inextricably links energy consumption to economic growth. The book extends this "nexus" to accommodate variables such as globalization, institutional variables, financial variables and the energy "mix." Rooted firmly in the modern literature, it covers empirical applications such as the evaluation of renewable energy incentives, the electricity generation mix, and sustainable development. Each application area incorporates modern econometric methodologies, including VAR, panel VAR, ARDL, panel ARDL, Asymmetric panel ARDL, and Panel Quantile Regression. Throughout chapters are accompanied by illustrative Stata and EViews code, demonstrating their uses in applied research. Primes researchers to understand advanced literature and current methodologies within the energy-growth nexus Provides a rich set of working tools for econometricians working on real-world energy and growth problems Accompanied by representative databases and illustrative Stata and EViews code, facilitating replication and use