Energy consumption and economic growth

the relationship between coal rents and carbon dioxide (CO2) in BRICS countries

GUMEDE, Iga Moses

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The BRICS economies, composed of Brazil, Russia, India, China and South Africa - are major contributors of Carbon Dioxide (CO2) emissions among the Newest Industrialized Countries (NICs). BRICS economies possess massive natural resource endowments especially fossil fuels (e.g. Coal), leading to greater exploitation of coal for energy consumption, while more available energy contributes to GDP growth. Although BRICS countries have pledged to curb CO2 emissions by 2030 at the COP21 (the Paris Agreement), complying with these pledges may be a difficult task without compromising economic growth. This study investigates the relationship between Coal Rents and CO2 emissions, in the presence of regulations (measured by the charge on CO2 damage) for BRICS and a randomly selected Panel of Selected Countries (PSC) consisting of 60 coal exploring economies. The study utilizes the Pooled Ordinary Least Squares (OLS) and Fixed Effects Econometric Models on panel data from 1990-2015 from the World Bank Development Indicator (WDI, 2017) for the variables of interest. The study empirical results indicate that in BRICS economies, coal rents have a significant and positive impact on CO2 emissions, which in turn negatively affects sustainable development. While regulations have a significant and positive impact to CO2 emissions and thus negatively affect sustainable development. Overall from a policy standpoint, the empirical estimates call for policymakers in both BRICS and PSC to pay close attention to low-carbonization measures for sustainable development without compromising economic growth. These measures include encouraging energy consumption from renewable and nuclear energy output, reducing incentives for coal consumption, application of Clean Coal Technology, and re-considering instituting regulations on carbonization.

Hahm, Sangmoon
KDI School, Master of Development Policy
Issue Date
KDI School
Thesis(Master) --KDI School:Master of Development Policy,2017
Carbon dioxide--BRIC countries.; Energy consumption--BRIC countries.
xiv, 85 p.
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