Empirical Analysis of Renewable Energy Consumption, Environmental Pollution and Official Development Assistance Impact on Human Development: Evidence from OECD Countries
DOI:
https://doi.org/10.31436/ijema.v30i2.1037Keywords:
Human development, Human Development Index, Renewable energy consumption, Official development assistance, Environmental pollutionAbstract
This study is aimed at establishing some of the key factors that have affected Human Development from 1990 to 2017. The Human Development Index was used as a dependent variable while renewable energy consumption, total CO2 emission, official development assistance, mean years of schooling, life expectancy at birth, employment to population ratio and population were used as the independent variables. Panel Data Analysis and panel causality were used to analyze the data. The conclusions show that renewable energy consumption, CO2, official development assistance, mean years of schooling, life expectancy at birth, and employment to population ratio affect the Human Development Index positively, while population affects the HDI negatively. Also, there is a bidirectional causality running from renewable energy consumption to HDI, from official development assistance, to HDI, from mean years of schooling to HDI and from employment to population ratio to HDI for the whole panel. Therefore, it was established that all independent variables in the study model are among the key determinants of human development.
References
Adenutsi, D. “Do International Remittances Promote Human Development in Poor Countries? Empirical Evidence from Sub-Saharan Africa.” The International Journal of Applied Economics and Finance no. 4 (2010): 31-45.
Akanbi, B.E., M. Adagunodo, and B.F. Satope. “Climate change, Human Development and Economic Growth in Nigeria.” International Journal of Humanities and Social Science 4, no. 13 (2014): 222–8.
Albiman, M.M., N.N. Suleiman, and H.O. Baka. “The Relationship Between Energy Consumption, CO2 Emissions and Economic Growth in Tanzania.” International Journal of Energy Sector Management 9, no. 3 (2015): 361-75.
Al-Mulali, U., L. Sheau-Ting, and I. Ozturk. “The Global Move Toward Internet Shopping and its Influence on Pollution: An Empirical Analysis.” Environmental Science and Pollution Research, 22, no. 13 (2015): 9717–27.
Alola, A.A., F.V. Bekun, and S.A. Sarkodie. “Dynamic Impact of Trade Policy, Economic Growth, Fertility Rate, Renewable and Non-Renewable Energy Consumption on Ecological Footprint in Europe.” Science of The Total Environment no. 685 (2019): 702-9.
Aneja, R., U.J. Banday, T. Hasnat, and M. Koçoglu. “Renewable and Non-Renewable Energy Consumption and Economic Growth: Empirical Evidence from Panel Error Correction Model.” Jindal Journal of Business Research 6, no. 1 (2017): 76-85.
Apergis, N., and J.E. Payne. “Renewable and Non-Renewable Energy Consumption-Growth Nexus: Evidence from a Panel Error Correction Model.” Energy Economics 34, no. 3 (2012): 733-8.
______, and J.E. Payne. “The Renewable Energy Consumption–Growth Nexus in Central America.” Applied Energy 88, no. 1 (2011): 343-7.
Arisman. “Determinant of Human Development Index in ASEAN Countries.” Signifikan: Jurnal Ilmu Ekonomi 7, no. 1 (2018): 113–22.
Asongu, S. “Development Thresholds of Foreign Aid Effectiveness in Africa.” International Journal of Social Economics 44, no. 11 (2014): 1131-55.
______. “Governance, CO2 Emissions and Inclusive Human Development in Sub-Saharan Africa.” Energy Exploration & Exploitation 38, no. 1 (2020): 18–36.
Asongu, S.A., and N.M. Odhiambo. “Environmental Degradation and Inclusive Human Development in Sub-Saharan Africa.” Sustainable Development 27, no. 1 (2019): 25-34.
Azizi, S. “The Impacts of Worker’s Remittances on Human Capital and Labor Supply in Developing Countries.” Economic Modelling no. 75 (2018): 377-96.
Baek, J. “Do Nuclear and Renewable Energy Improve the Environment? Empirical Evidence from The United States.” Ecological Indicators no. 66 (2016): 352-6.
Baloch, M.A., Danish, S.U.D. Khan, and Z.?. Ulucak. “Poverty and Vulnerability of Environmental Degradation in Sub-Saharan African Countries: What Causes What?” Structural Change and Economic Dynamics no. 54 (2020): 143-9.
Baltagi, B.H., and Q. Li. “Testing AR (1) Against MA (1) Disturbances in an Error Components Model.” Journal of Econometrics 68, no. 1 (1995): 133-15.
Bergh, J. and W. Botzen. “Global Impact of a Climate Treaty if the Human Development Index Replaces GDP as a Welfare Proxy.” Climate Policy 18, no. 1 (2018): 76-85.
Berhane, A. H. “The Impact of Official Development Assistance (ODA) on Human Development Index (HDI)” Journal of Marketing Thought, 4 no. 3 (2017): 40-8.
Bhowmik, D. “Nature of Human Development in SAARC Region: A Panel Data Analysis.” Journal of Quantitative Finance and Economics 1, no. 2 (2019): 111-33.
Bingöl, U., and F. Ayhan. “The Impact of NEET and Labor Market Indicators on Human Development: A Panel Data Analysis for EU-28 Countries.” Sosyal Siyaset Konferanslar? Dergisi no. 79 (2020): 441-68.
Born, B., and J. Breitung. “Simple Regression-Based Tests for Spatial Dependence.” The Econometrics Journal 14, no. 2 (2011): 330-42.
Breusch, T.S., and A.R. Pagan. “The Lagrange Multiplier Test and Its Applications to Model Specification Tests in Econometrics.” Review of Economic Studies 47, no. 1 (1980): 239-53.
Brini, R., M. Amara, and H. Jemmali. “Renewable Energy Consumption, International Trade, Oil Price and Economic Growth Inter-Linkages: The case of Tunisia.” Renewable and Sustainable Energy Reviews no. 76 (2017): 620-7.
Brinkman, R. “Economic Growth versus Economic Development: Toward a Conceptual Clarification.” Journal of Economic Issues 29, no. 4 (1995): 1171-88.
Brooks, N., W.N. Adger, and P.M. Kelly. “The Determinants of Vulnerability and Adaptive Capacity at The National Level and The Implications for Adaptation.” Global Environmental Change 15, no. 2 (2005): 151–63.
Bundala, N. “Economic Growth and Human Development; A Link Mechanism an Empirical Approach.” Munich Personal RePEc Archive, 2012.
Costa, L., D. Rybski, and J.P. Kropp. “A Human Development Framework for CO2 Reductions.” PLoS ONE no. 6 (2011): 1-9.
Crentsil, A.O., A.Derek, and A.P. Fenny. “Assessing the Determinants and Drivers of Multidimensional Energy Poverty in Ghana.” Energy Policy no.133 (2019): 110884.
Destek, M.A., and A. Aslan. “Disaggregated Renewable Energy Consumption and Environmental Pollution Nexus in G7 Countries.” Renewable Energy no. 151 (2019): 1298-306.
Dong, K., X. Dong, and Q. Jiang. “How Renewable Energy Consumption Lower Global CO2 Emissions? Evidence from Countries with Different Income Levels.” The World Economy 43, no. 6 (2020): 1665–98.
Emirmahmutoglu, F., and N. Kose. “Testing for Granger Causality in Heterogeneous Mixed Panels.” Economic Modelling 28, no. 3 (2011): 870–6.
______. Econometric Analysis (5th Edition). Prentice Hall, Englewood Cliffs, NJ. 2003.
Feriyanto, N. “The Effect of Employment, Economic Growth, And Investment on HDI: In Provinces in Indonesia.” Journal of Economics, Business, and Accountancy Ventura 19, no. 1 (2016): 1-12.
Greene, W.H. Econometric Analysis, Seventh Edition. New York: Prentice Hall. 2012.
Grubaugh, S.G. “Economic Growth and Growth in Human Development.” Applied Econometrics and International Development 15, no. 2 (2015): 5–16.
Haseeb, M., S. Kot, H.I. Hussain, and K. Jermsittiparsert. “Impact of Economic Growth, Environmental Pollution, and Energy Consumption on Health Expenditure and R&D Expenditure of ASEAN Countries.” Energies 12, no. 19 (2019): 3598.
Hossain, M.S. “Panel Estimation for CO2 Emissions, Energy Consumption, Economic Growth Trade Openness and Urbanization of Newly Industrialized Countries.” Energy Policy 39, no. 11 (2011): 6991–9.
IEA. Renewables information, IEA Publications, Paris, France, 2019b.
______. World energy statistics, IEA World Energy Statistics and Balances (database), 2019a.
Jha, R. and K.V.B. Murthy. “An Inverse Global Environmental Kuznets Curve.” Journal of Comparative Economics no. 31 (2003): 352–68.
Karnani, A. “Reducing Poverty through Employment.” Innovations: Technology, Governance, Globalization no. 6 (2011): 73–97.
Keskin, A. “Ekonomik Kalk?nmada Be?eri Sermayenin Rolü ve Türkiye.” Atatu?rk Üniversitesi ?ktisadi ve ?dari Bilimler Dergisi no. 25 (2011): 125-53.
Khodabakhshi, A. “Relationship between GDP and Human Development Indices in India.”
International Journal of Trade, Economics and Finance no. 2 (2011): 251-3.
Kmenta, Jan. Elements of Econometrics (2nd Edition). Macmillan, New York, NY. 1986.
Koçak, E., and A. ?arkgüne?i. “The Renewable Energy and Economic Growth Nexus in Black Sea and Balkan Countries.” Energy Policy no. 100 (2017): 51-7.
Kraft, J., and A. Kraft. “On the Relationship between Energy and GNP.” The Journal of Energy and Development 3, no. 2 (1978): 401–3.
Lee, E., K. Jung, and J. Sul. “Searching for the Various Effects of Subprograms in Official Development Assistance on Human Development across 15 Asian Countries: Panel Regression and Fuzzy Set Approaches.” Sustainability 11, no. 4, (2019): 2-21.
Mihci, H., M.T. Taner, and B. Sezen. “Employment-adjusted Human Development Index.” South East European Journal of Economics and Business no. 7 (2012): 115–38.
Moe, T. “An Empirical Investigation of Relationships between Official Development Assistance (ODA) and Human and Educational Development.” International Journal of Social Economics no. 35 (2008): 202-21.
Mohmmed, A., Z. Li, AO. Arowolo, H. Su, X. Denga, O. Najmuddin, and Y. Zhang. “Driving Factors of CO2 Emissions and Nexus with Economic Growth, Development and Human Health in The Top Ten Emitting Countries.” Resources, Conservation & Recycling no. 148 (2019): 157–69.
Narayan, S., and N. Doytch. “An Investigation of Renewable and Non-Renewable Energy Consumption and Economic Growth Nexus Using Industrial and Residential Energy Consumption.” Energy Economics no. 68 (2017): 160-76.
OECD. Environment at a Glance 2020. Paris, France: OECD Publishing, 2020.
Omri, A. and F. Belaïd. “Does Renewable Energy Modulate the Negative Effect of Environmental Issues on The Socio-Economic Welfare?” Journal of Environmental Management 278 (2021): 111483.
Pao, H.T. and H.C. Fu. “Renewable Energy, Non-Renewable Energy and Economic Growth in Brazil.” Renewable and Sustainable Energy Reviews no. 25 (2013): 381-92.
Parks, R.W. “Efficient Estimation of a System of Regression Equations When Disturbances Are Both Serially and Contemporaneously Correlated.” Journal of the American Statistical Association 62, no. 318 (1967): 500-9.
Paul, S. and R.N. Bhattacharya. “Causality between Energy Consumption and Economic Growth in India: A Note on Conflicting Results.” Energy Economics 26, no. 6 (2004): 977–83.
Pesaran, M.H. “General Diagnostic Tests for Cross Section Dependence in Panels.” Cambridge Working Papers in Economics, no. 435, 2004.
______. “A Simple Panel Unit Root Test in The Presence of Cross?Section Dependence.” Journal of Applied Econometrics 22, no. 2 (2007): 265-312.
______, A. Ullah, and T. Yamagata. “A Bias-Adjusted LM Test of Error Cross-Section Independence.” Econometrics Journal 11, no. 1 (2008): 105-27.
Ranis, G. and F. Stewart. “Dynamic Links between The Economy and Human Development.” United Nations, Department of Economics and Social Affairs, Working Papers no. 5 (2005): 1-16.
______, F. Stewart, and A. Ramirez. “Economic Growth and Human Development.” World Development no. 28 (2000): 197–219.
Sabyasachi, T. “Urbanization and Human Development Index: Cross-country evidence National Research University Higher School of Economics.” MPRA 2019. https://mpra.ub.uni-muenchen.de/97474/MPRA Paper No. 97474,
Salim, R., S., Rafiq, S. Shafiei, and Y. Yao. “Does Urbanization Increase Pollutant Emission and Energy Intensity? Evidence from Some Asian Developing Economies.” Applied Economics 51, no. 36 (2019): 4008-24.
Samuelson, Paul Anthony. and William, D.N. Economics, 13. Bas?m, Singapore: McGraw-Hill Book Company, 1989.
Sangaji, J. “The Determinants of Human Development Index in Several Buddhist Countries.” Journal of Buddhist Education and Research no. 2 (2016): 48-60.
Sasmaz, M.U., E. Sakar, Y.E. Yayla, and U. Akkucu. “The Relationship between Renewable Energy and Human Development in OECD Countries: A Panel Data Analysis.” Sustainability 12, no. 18 (2020): 1-16.
Sen, Amartya K. Choice, Welfare and Measurement. Oxford: Basil Blackwell, 1982.
______. Commodities and Capabilities. Cambridge: Cambridge University Press, 1985.
Serkan, G. “Economic Growth, Industrial Pollution and Human Development in the Mediterranean Region.” Ecological Economics no. 68 (2009): 2327–35.
Shafiei, S. and R.A. Salim. “Non-Renewable and Renewable Energy Consumption and CO2 Emissions in OECD Countries: A Comparative Analysis.” Energy Policy 66 (2014): 547-56.
Shah, S. “Determinant of Human Development Index: A Cross-Country Empirical Analysis.” Munich Personal RePEc Archive (MRPA) Paper No. 73759, 2016. https://mpra.ub.uni-muenchen.de/73759/1/MPRA_paper_73759.pdf
Shakouri, B., S.K. Yazdi and E. Ghorchebigi. “Does Tourism Development Promote CO2 Emissions?” Anatolia, no. 28: (2017): 444-52.
Shirazi, F., O. Ngwenyama, and O. Morawczynski. “ICT Expansion and the Digital Divide in Democratic Freedoms: An Analysis of the Impact of ICT Expansion, Education and ICT Filtering on Democracy.” Telematics and Informatics 27, no. 1 (2010): 21–31.
Shirazi, N.S., T.A. Mannap, and M. Ali. “Effectiveness of Foreign Aid and Human Development.” Pakistan Development Review 47, no. 4 (2009): 853-62.
Shon, C., T.H. Lee, G.O. Ndombi, and E.W. Nam. “A Cost-Benefit Analysis of the Official Development Assistance Project on Maternal and Child Health in Kwango, DR Congo.” International Journal of Environmental Research and Public Health 15, no. 7 (2018): 2-11.
Soukiazis, E., S. Proença, and P.A Cerqueira. “The Interconnections between Renewable Energy, Economic Development and Environmental Pollution. A Simultaneous Equation System Approach, CeBER Working Papers, no. 10 (2017).
______, S. Proença, and P.A. Cerqueira. “The Interconnections between Renewable Energy, Economic Development and Environmental Pollution: A Simultaneous
Equation System Approach.” The Energy Journal no. 40 (2019): 1-23.
Spierre, S.G., T.P. Seager and E. Selinger. “The Diminishing Returns to the 2010 Human Development Index: Implications for Climate Policy and Sustainable Development.” Journal of Sustainable Development no. 6 (2013): 34-47.
Sumaryoto, M. Herawati, and A.T. Hapsari. “Analysis of Changes in the Unemployment Rate as a Result of the Human Development Index in Indonesia (Case Study 2010-2019).” Journal of Economics and Business no. 3 (2020): 1538-48.
Suri, T., A.M. Boozer, G. Ranis, and F. Stewart. “Paths to Success: The Relationship Between Human Development and Economic Growth.” World Development 39, no. 4 (2011): 506-522.
Tatoglu, Ferda Yerdelen. Panel Data Econometrics. ?stanbul: Beta Publications, 2013.
Tudorache, M.D. “Examining the Drivers of Human Development in European Union.” In: Proceedings of 35th IBIMA Conference, Seville, Spain, BIMA Publishing, King of Prussia, PA, (2020): pp. 4726-35, https://ibima.org/accepted-paper/examining-the-drivers-of-human-development-in-european-union/
UNDP Aid for the 21st Century. Human Development Report; New York: Oxford University Press, 2005.
UNDP Human Development Report 1990. New York: Oxford University Press, 1990.
Ustubici, A., and D. Irdam. “The Impact of Remittances on Human Development: A Quantitative Analysis and Policy Implications.” Economics & Sociology 5, no. 1 (2012): 74–95.
Vo, D.H., H.M. Nguyen, A.T. Vo, and M. McAleer. “CO2 Emissions, Energy Consumption and Economic Growth: Evidence from the Trans-Pacific Partnership.” Erasmus School of Economics Econometric Institute Research Papers. No. EI2019-11, 2019. http://www.hdl.handle.net/1765/115609.
Wang, N., and Y.C. Chang. “The Evolution of Low-Carbon Development Strategies in China.” Energy no. 68 (2014): 61–70.
Wang, Z., Q. Bui, B. Zhang, C.L.K. Nawarathna, and C. Mombeuil. “The Nexus between Renewable Energy Consumption and Human Development in BRICS Countries: The Moderating Role of Public Debt.” Renewable Energy 165, no. 1 (2021): 381-90.
______, Q. Bui, B. Zhang, T. Le, and H. Pham. “Biomass Energy Production and Its Impacts on The Ecological Footprint: An Investigation of the G7 Countries.” Science of The Total Environment no. 743 (2020): 140741.
Zgheib, P.W., Z.U. Ahmed, S. Beldona, and V. Gebara. “The Impact of Population Growth on Human Development Index: A Comparative Analysis of Middle Eastern Countries.” World Review of Science Technology and Sustainable Development no. 3 (2006): 258–69.
Downloads
Published
How to Cite
Issue
Section
