A1 Journal article (refereed), original research

Corruption, climate and the energy-environment-growth nexus

Open Access hybrid publication

Publication Details
Authors: Arminen Heli, Menegaki Angeliki N.
Publisher: Elsevier
Publication year: 2019
Language: English
Related Journal or Series Information: Energy Economics
Volume number: 80
Start page: 621
End page: 634
Number of pages: 14
ISSN: 0140-9883
eISSN: 1873-6181
JUFO-Level of this publication: 1
Open Access: Open Access hybrid publication


This paper examines the causal
relationships between economic growth, energy consumption and carbon dioxide (CO2)
emissions in high-income and upper-middle-income countries using the simultaneous
equations framework, with data from 1985–2011. By taking institutional
quality (measured by the level of corruption) and climate (measured by average
temperatures over the winter and summer months) into account, this is the first
study to incorporate both of these factors into a simultaneous equations model
within the energy-environment-growth nexus. The dependent variables in the system
of three simultaneous equations are real gross domestic product (GDP), energy
consumption and CO2 emissions as a proxy for air pollution. The results
have two important implications. First, they document a bidirectional causal relationship
between GDP and energy consumption but do not provide support for the environmental
Kuznets curve (EKC) hypothesis. This is revolutionary in the sense that it
indicates that high-income and upper-middle-income countries base their
economic growth on a feedback relationship with energy consumption and that the
ensuing pollution has not yet reached a maximum point, even in these countries.
Second, by implying that climate and weather variations are more important
determinants of energy consumption and CO2 emissions than
corruption, the results suggest that changes in institutional quality are
likely to have only a limited impact on energy and environmental policies.

Last updated on 2020-20-03 at 10:03