An empirical analysis of urbanization and energy consumption in the South Asian Association for Regional Cooperation Countries

Dev, Tithy (2021) An empirical analysis of urbanization and energy consumption in the South Asian Association for Regional Cooperation Countries. Masters thesis, Memorial University of Newfoundland.

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Abstract

Urbanization has posed some tremendous challenges which are related to environmental stresses through increased energy consumption. These challenges have drawn attention to the need to implement urbanization with sustainable energy consumption globally. The South Asian Association for Regional Cooperation is considered in the study during the period of 1975-2014 with time series data. The present study aims to investigate how urbanization can affect energy use and identify the urbanizing factors that cause energy consumption in this region. The data are analyzed by using simple statistics and econometric techniques, such as the ordinary least squares (OLS) method for country level, and fully modified least squares and Granger causality for this group of countries. The study has found that all urbanizing variables significantly affect energy consumption with different levels in different countries, as shown by the OLS method. Similarly, the results of the fully modified least squares (FMOLS) method indicate that all the variables are statistically significant at 1% level of significance except urban population growth, although the effects vary among variables. Moreover, there are three long-run causalities running from the gross domestic product to energy consumption, and from energy consumption to gross domestic product, and to the industrial share in the gross domestic product. Besides, in the short run, the causality the exercise explored is a bidirectional causality between the gross domestic product and the energy consumption, the gross domestic product and the industrial share in the gross domestic product, the energy consumption and the service share in the gross domestic product, the energy consumption and urban population. Green technology and energy efficiency technologies to use in the industries, encourage using public transportation, some restrictions on household-level energy use, and education for awareness about energy use and its consequences on the environment, sustainable energy and urbanization are potential policy recommendations.

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