Energy consumption to environmental degradation, the growth appetite in SAARC nations

This study aims to investigate the role of energy consumption on environmental degradation under multivariate framework for emerging and frontier Asian markets. We have included CO2 emission, GDP and population growth with energy consumption as additional determinants of environmental degradation. The application of panel unit root test suggests non-stationary properties of included variables however we report significant co-integration among these variables. Furthermore, presence of Environmental Kuznets Curve (EKC) was detected using the application of fully modified OLS and dynamic OLS. Level of energy consumption tends to increase environmental degradation thereby confirming the Pollution Haven Hypothesis (PHH). Bidirectional causality was also observed between CO2 emission and economic growth. Results of this study are variable to different countries and present sound economic policy implications for the improvement of environmental standards.