Energy Consumption, Economic Growth and Carbon Emission: Dynamic Panel Cointegration Analysis for Selected OECD Countries

One of the important inputs to the production process is energy. Energy consumption is proportional to a country's economic growth. Energy consumption and energy supplied from fossil fuels in production process, cause carbondioxide (CO2) emissions and environmental deterioration. In this study, casual relationships among economic growth, energy consumption and CO2 emissions were investigated for selected eleven OECD countries(Brasil, France, Greece, Italy, Korea Republic, Mexico, Netherland, Poland, Spain, Turkey, UK, USA) and Brasil over the period 1970-2011. In this study, firstly, Cross Sectionally Dependency (CD) in a country was examined by using CDLM test (Cross Sectionally Dependency Lagrange Multiplier) developed by Pesaran (2004), . Stationary of series was investigated with CADF test (Cross-Sectionally Augmented Dickey-Fuller) developed by Pesaran (2006), by considering CD. Cointegration relationship among series was examined by using panel cointegration test with multiple structural breaks developed by Basher and Westerlund (2009). As a result of the empirical analysis, cointegration relationship between the series was determined.