LPG consumption and environmental Kuznets curve hypothesis in South Asia: a time-series ARDL analysis with multiple stru
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RESEARCH ARTICLE
LPG consumption and environmental Kuznets curve hypothesis in South Asia: a time-series ARDL analysis with multiple structural breaks Muntasir Murshed 1,2 Received: 7 March 2020 / Accepted: 1 September 2020 # Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract This paper aims to scrutinize the validity of the greenhouse emissions-induced environmental Kuznets curve (EKC) hypothesis, controlling for liquefied petroleum gas (LPG) consumption, FDI inflows, and trade openness, in the context of six South Asian economies. Besides, the impacts of LPG use on both aggregate and disaggregated emissions of greenhouse gases are also evaluated. Using annual data from 1980 to 2016, the elasticity estimates from the autoregressive distributed lag (ARDL) regression analysis confirms the authenticity of the EKC hypothesis for Bangladesh, India, Sri Lanka, and Bhutan. In the cases of Pakistan and Nepal, economic growth, in the long-run, is evidenced to monotonically increase and decrease the greenhouse emissions, respectively. However, LPG consumption is found to homogenously reduce all types of greenhouse emissions in each of the selected South Asian nations. Moreover, in majority of the cases, statistical evidence of joint favorable impacts of economic growth and LPG consumption on the environment are ascertained. Furthermore, the Hacker and Hatemi-J bootstrapped causality analysis finds causal relationships between economic growth, greenhouse emissions, and LPG consumption. However, the causality estimates are found to be heterogeneous across the different South Asian nations considered in the analysis. The results, in a nutshell, denote that economic growth is both the cause and the solution to the greenhouse emission problems faced by the South Asian economies. Moreover, the results also assert that LPG can be a transitional fuel to reduce these emissions before the South Asian nations are ready to undergo transition from non-renewable to renewable energy consumption. Hence, the findings impose key fuel-diversification policy implications for the South Asian governments. Keywords EKC hypothesis . Liquefied petroleum gas . Structural breaks . South Asia . Pollution haven hypothesis
Introduction In the contemporary era, sustaining environmental well-being alongside economic growth has become a prioritized global agenda. Consequently, the world economies have pledged, under the United Nations’ Sustainable Development Goals (SDG) declarations1, to safeguard the environmental attributes 1 For more information on the environmental aspects of the SDG see UNDP (2018, 12 March) and Murshed et al. (2020a).
Responsible Editor: Nicholas Apergis * Muntasir Murshed [email protected] 1
School of Business and Economics, North South University, Dhaka, Bangladesh
2
Bangladesh Institute of Development Studies (BIDS), Dhaka, Bangladesh
to the best of their respective capacities (Chirambo 2018). These contemporary thoughts have debunked the traditional misconceptions that have resulted in the
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