Effects of energy consumption and economic growth on environmental quality: evidence from Qatar

Ṣalāḥuddīn, Muḥammadu; Gow, Jeff

Effects of energy consumption and economic growth on environmental quality: evidence from Qatar

2019

Ṣalāḥuddīn, Muḥammadu | Gow, Jeff

This study examines the empirical effects of four variables: economic growth, energy consumption, foreign direct investment, and financial development on environmental quality in Qatar. Three environmental quality indicators, namely, per capita CO₂ emissions, energy intensity (EI), and Adjusted National Savings (ANS) are used to examine the interactions between the variables using a time series dataset for the period 1980−2016. Following an appropriate multiple structural breaks unit root and cointegration tests, short- and long-run coefficients were estimated through the application of Autoregressive Distributive Lag (ARDL) model. The Toda-Yamamoto (TY) causality test was conducted to determine the causal link, if any, among the variables. Estimated results suggest a detrimental long-run effect of energy consumption on all three indicators of environmental quality. FDI has a negative long-run effect on environmental quality when it is measured by EI only. Financial development has no significant effect on any of the indicators. Bidirectional causality are noted between three variables: economic growth, energy consumption, and financial development and all three indicators of environmental quality. Policy implications are discussed.

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