Renewable and Non-Renewable Energy and its Impact on Environmental Quality in South Asian Countries

Sadia Ali, Sofia Anwar, Samia Nasreen

Abstract

The study explores the causal link between environmental quality, renewable and non-renewable sources of energy, per capita output and population density in the region of South Asia. Four countries i.e. Bangladesh, India, Sri Lanka and Pakistan from South Asia have been selected for the analysis. The study conducts both time series and panel analysis and covers the period of 1980-2013. The study applied Johanson co-integration, Larsson panel co-integration and DH causality approach. Empirical results confirm the presence of co-integration between variables. The study found positive impact of per capita output, population density and non-renewable energy sources on CO2. However, the negative sign of renewable energy sources indicates that CO2 emissions per capita decrease 0.352% as 1% increase in renewable energy sources. The study likewise boosts the theory of the Environmental Kuznets Curve (EKC) which accepts a rearranged U-molded way. The study also found the substantiation of bi[1]directional panel causality running from CO2 to RE sources and from population destiny to CO2. Results provide evidence of feedback relationship between environment and renewable energy sources and there is also unidirectional causality running from CO2 to non-renewable energy sources. In order to keep our environment clean and pollution free, the study prerequisites to devise the policies which rely on renewable energy sources to uplift economic growth.