Energy consumption and environmental quality in South Asia: evidence from panel non-linear ARDL

The objective of this study is to estimate the non-linear effect of energy consumption i.e. oil, gas, electricity, and coal consumption on CO₂ emission in South Asian countries. The study uses annual panel data of three South Asian countries i.e. Bangladesh, India, and Pakistan from 1985 to 2017 and applies panel non-linear ARDL methodology to examine the long-run and short-run relationship. Results show that an increase in gas, electricity, coal, and electricity consumption leads to an increase in the carbon dioxide emission, whereas decrease in electricity and coal consumption reduces the carbon dioxide emissions in the long run. Non-linear relationship exists between electricity consumption and CO₂ emissions as well as between coal consumption and CO₂ emissions in South Asian countries in the long run. Results of short run dynamics of individual countries show that non-linear relationship exists between oil consumption and CO₂ emissions, electricity consumption and CO₂ emissions, and coal consumption and CO₂ emissions in Bangladesh and Pakistan. Research and development centers are required to control pollution through new technologies, while discourage to use higher electricity and coal consumption as a source of energy for a healthier environment.