Energy: An Exploratory Study on the Experience of Developing Countries in the Context of Development and the State of the Environment

Abstract

Energy is required for development because it facilitates production and makes day to day activity less cumbersome. The industrial revolution and the progress after that would not have been possible without increased energy use. Issues related to energy use in developing countries are complicated. These countries use energy derived mostly from non-renewable sources such as petroleum, coal and inefficient fuels like firewood, and biomass. Thus, energy use leads to environmental pollution. Hence, policy measures aimed at the development imperative may conflict with policies relating to conserving the environment. Against this background, the paper tries to examine the relationship between energy use and development at the macro and micro levels and how energy use affects the environment. This study is exploratory and relies on traditional literature review. Our study relates to nonrenewable energy sources in the context of developing countries. We find that there is no uniformity of results in the relationship between energy use, development and the state of the environment. We recommend further studies to ascertain the causes of such inconclusiveness. At the household level, people are deprived of the assured and adequate supply of efficient fuels for domestic use. Hence, policy measures should strive to ensure ease of access to reliable and affordable energy sources as development proceeds.

Keywords

Growth Hypothesis, Feedback Hypothesis, Neutrality Hypothesis, Conservation Hypothesis, Energy Ladder, Fuel Stacking

Author Biography

Manoj Kumar Talukdar, Mr.

Associate professor, Department of Economics

Ratul Mahanta, DR

Associate professor, Department of Economics

References

Abebaw, D. (2007). Household determinants of fuel wood choice in urban Ethiopia: a case study of Jimma town. The Journal of Developing Areas, 117-126
Ahmed, K. and Long, W. (2014). Environmental Kuznets Curve and Pakistan: An Empirical Analysis. Procedia Economics and Finance 1, 4–13
Akhmat, G. and Zaman, K. (2013). Nuclear energy consumption, commercial energy consumption and economic growth in South Asia: bootstrap panel causality test. Renewable and Sustainable Energy Reviews, 25, 552-559
Akpalu, W., Dasmani, I. and Aglobitse, P. B. (2011). Demand for cooking fuels in a developing country: To what extent do taste and preferences matter? Energy Policy, 39(10), 6525-6531
Al-Mulali, U., Fereidouni, H. G., Lee, J. Y. and Sab, C. N. B. C. (2013). Examining the bi-directional long run relationship between renewable energy consumption and GDP growth. Renewable and Sustainable Energy Reviews, 22, 209-222
Apergis, N. A. and Payne, J.E. (2011). A dynamic panel study of economic development and the electricity consumption-growth nexus, Energy Economics, 33, 770–781
Arto, I., Perez, I., LAgo, R. and Bermejo, R. (2016). The energy requirements of a developed world. Energy for Sustainable Development, 33, 1-13
Ayres, R. U. (1998). Eco-thermodynamics: economics and the second law. Ecological Economics, 26, 189–209
Behera, J. (2015). ‘Examined the energy-led growth hypothesis in India: Evidence from time series analysis contribution/originality’. Energy Economics Letters, 2(24), 46-65
Chaurey, A., Krithika, P., Palit, D., Rakesh, S., and Sovacool, B. (2012). New partnerships and business models for facilitating energy access. Energy policy, 47, 48-55.
Chen, S.T., Kuo, H. I., and Chen, C. (2007). The relationship between GDP and electricity consumption in 10 Asian countries. Energy Policy, 35, 2611–2621
Cheng, C. and Urpelainen, J. (2014). Fuel stacking in India: Changes in the cooking and lighting mix, 1987–2010. Energy, 76(1), 306-317
Estrada, G., Acharya, Y., Batten, A., Brimble, P., Doung, P., Gulamov, M., Hossain, M., Mellor, D., Park, D. and Rahman, S. (2013). The service sector in lower income Asian economies. Asian Development Bank Working paper series. Available at www.adb.org
Freitas, L.C., and Kaneko, S. (2011). Decomposing the decoupling of CO2 emissions and economic growth in Brazil. Ecological Economics, 70, 1459–1469
Ghosh, S. (2010). Examining carbon emissions economic growth nexus for India: A multivariate cointegration approach. Energy Policy, 38, 3008-3014
Gollagari, R., G. and Rena, R. (2013). An empirical analysis of energy consumption and economic growth in India: are they casually related? Studia Oeconomica, 58(2): 22-40
Heltberg, R. (2004). Fuel switching: evidence from eight developing countries. Energy economics, 26(5), 869-887
Horst H.V., G. and Hovorka, A. J. (2008). Reassessing the “energy ladder”: household energy use in Maun, Botswana. Energy Policy, 36(9), 3333-3344
Hosier, R. H. and Dowd, J. (1987). Household fuel choice in Zimbabwe: an empirical test of the energy ladder hypothesis. Resources and energy, 9(4), 347-361
Hosier, R. H., Mwandosya, M. J. and Luhanga, M. L. (1993). Future energy development in Tanzania: the energy costs of urbanization. Energy policy, 21(5), 524-542
IEA (2006). ‘World Energy Outlook 2006’, Outlook, p. 600pp. doi: 10.1787/weo-2006-en.
IEA (2019). Statistics Global energy data at your fingertips. https://www.iea.org. Accessed on 15.03.19
Jalil, A. and Mahmud, S. (2009).Environment Kuznets curve for CO2 emissions: A cointegration analysis for China. Energy Policy 37, 5167–5172
Jesson, J., Matheson, L. and Lacey, F. M. (2011). Doing your literature review: Traditional and systematic techniques. Sage, London
Kanjilal, K. and Ghosh, S. (2013). Environmental Kuznet’s curve for India: Evidence from tests for cointegration with unknown structuralbreaks. Energy Policy, 56, 509-515
Kroon, V.D., B., Brouwer, R. and Van Beukering, P. J. (2013). The energy ladder: Theoretical myth or empirical truth? Results from a meta-analysis. Renewable and Sustainable Energy Reviews, 20, 504-513
Kümmel, R., Ayres, R. and Lindenberger, D. (2010). Thermodynamic laws, economic methods and the productive power of energy. J. Non-Equilib. Thermodyn. 35, 145–179
Kuznets, S. (1955). Economic Growth and income inequality. American Economic Review, 45: 1–28
Maddala, G.S. (2004). Microeconomics: Theory and Applications. Tata McGraw-Hill Education, India
Malla, S. (2013). Household energy consumption patterns and its environmental implications: Assessment of energy access and poverty in Nepal. Energy policy, 61, 990-1002
Masera, O. and Navia, J. (1997). Fuel switching or multiple cooking fuels? Understanding inter-fuel substitution patterns in rural Mexican households. Biomass and Bioenergy, 12(5), 347-361
Masera, O. R., Saatkamp, B. D. and Kammen, D. M. (2000). From linear fuel switching to multiple cooking strategies: a critique and alternative to the energy ladder model. World development, 28(12), 2083-2103
Masih, A. M. and Masih, R. (1996). Energy consumption, real income and temporal causality: results from a multi-country study based on cointegration and error-correction modelling techniques. Energy economics, 18(3), 165-183
Mensah, J.T. (2014). Carbon emissions, energy consumption and output: A threshold analysis on the causal dynamics in emerging African countries. Energy Policy, 70, 172–182
Muller, C. and Yan, H.(2016). Household fuel use in developing countries: Review of theory and evidence, halshs-01290714, https://halshs.archives-ouvertes.fr/halshs-01290714/document
Murthy, I. K. (2012). A causal study between electricity consumption and CO 2 emissions in India. Prabandhan: Indian Journal of Management, 5(7), 43-52
Narayan, P.K. and Narayan, S. (2010). Carbon dioxide emissions and economic growth: Panel data evidence from developing countries. Energy Policy, 38, 661–666
Nasreen, S., and Anwar, S. (2014). Causal relationship between trade openness, economic growth and energy consumption: a panel data analysis of Asian Countries. Energy Policy, 69, 82–91
Ngui, D., Mutua, J., Osiolo, H. and Aligula, E. (2011). Household energy demand in Kenya: An application of the linear approximate almost ideal demand system (LA-AIDS). Energy policy, 39(11), 7084-7094
Ogwumike U., Ozughalu, M. and Abiona, G.A.(2014). household energy use and determinants: evidence from Nigeria Fidelis O. International Journal of Energy Economics and Policy, 4(2), 248-262
Ozturk, I.(2010). Literature survey on energy–growth nexus. Energy Policy, 38, 340–349
Pachauri, S. (2004). An analysis of cross-sectional variations in total household energy requirements in India using micro survey data. Energy Policy, 32(15), 1723-1735
Pachauri, S. and Spreng, D. (2004). Energy use and energy access in relation to poverty. Economic and Political Weekly, 39 (3), 271-278
Pardo, C., S. and Ruiz, B. (2012). Energy context in Latin America. Energy, 40(1), 39-46
Paul, S. and Bhattacharya, R. N. (2004). CO2 emission from energy use in India: a decomposition analysis. Energy Policy, 32(5), 585-593
Peng, W., Hisham, Z. and Pan, J. (2010). Household level fuel switching in rural Hubei. Energy for Sustainable Development, 14(3), 238-244
Rao, M. N. and Reddy, B. S. (2007). Variations in energy use by Indian households: an analysis of micro level data. Energy, 32(2), 143-153
RECAP (2017). Energy consumption: The Asian Experience. http://recap.asia/climate-asia/Energy-Consumption.html. Accessed on 22.04.19
Robalino-López, A., Garcia-Ramos, J.E., Golpe, A.A., Mena-Nieto, Á. (2014). System dynamics modelling and the environmental Kuznets curve in Ecuador (1980-2025). Energy Policy, 67, 923-931.
Robalino-López, A., Mena, A., Garcia-Ramos, J. and Golpe, A. (2014). Studying the relationship between economic growth, CO2 emissions, and the environmental Kuznets curve in Venezuela (1980-2025). Renewable and Sustainable Energy Reviews. 41 ( C ), 602-614
Sahoori, B. N. and Sulaiman, J. (2013). Environmental degradation, economic growth and energy consumption: Evidence of the environmental Kuznets curve in Malaysia, Energy Policy, 60, 892–905
Sehjpal, R., Ramji, A., Soni, A. and Kumar, A. (2014). Going beyond incomes: Dimensions of cooking energy transitions in rural India. Energy, 68, 470-477
Shahateet, M. I. (2014). Modeling economic growth and energy consumption in Arab countries: Cointegration and causality analysis. International Journal of Energy Economics and Policy, 4(3), 349-359
Shahbaz, M., Uddin, G. S., Rehman, I. U. and Imran, K. (2014). Industrialization, electricity consumption and CO2 emissions in Bangladesh. Renewable and Sustainable Energy Reviews, 31, 575-586
Shahbaz, M., Zeshan, M. and Afza, T. (2012). Is energy consumption effective to spur economic growth in Pakistan? New evidence from bounds test to level relationships and Granger causality tests. Economic Modelling, 29, 2310–2319
Sharma, S. S. (2011). Determinants of carbon dioxide emissions: Empirical evidence from 69 countries. Applied Energy 88, 376–382
Sheinbaum-Pardo, C., Mora-Pérez, S. and Robles-Morales, G. (2012). Decomposition of energy consumption and CO2 emissions in Mexican manufacturing industries: Trends between 1990 and 2008. Energy for Sustainable Development 16, (1), 57-67
Sovacool, B. and Vivoda, V. (2012). A comparison of Chinese, Indian and Japanese perceptions of energy security, Asian Survey, 52(5), 949-969.
Sovacool, B.K. and D’Agostino, A.L. (2012). A comparative analysis of solar home system programmes in China, Laos, Mongolia and Papua New Guinea. Progress in Development Studies 12 (4), 315–335
Soytas, U. and Sari, R. (2003). Energy consumption and GDP: causality relationship in G-7 countries and emerging markets. Energy Economics, 25(1), 33-37
Stern, D.I. (2014). Economic growth and energy, Encyclopedia of Energy, 2, 35-51
U.N. (2016). Responsible consumption & production: Why it matters. https://www.un.org/sustainabledevelopment
Vidyarthi, H., (2013). Energy consumption, carbon emissions and economic growth in India. World Journal of Science, Technology and Sustainable Development, 10(4), 278-287
WHO, (2018). Household air pollution and health. Available at https://www.who.int. Accessed on 21.04.19
Wolde-Rufael, Y. (2006). Electricity consumption and economic growth: a time series experience for 17 African countries. Energy Policy, 34 (10), 1106-1114
Xiaohua, W. and Jingfei, L. (2005). Influence of using household biogas digesters on household energy consumption in rural areas—a case study in Lianshui County in China. Renewable and Sustainable Energy Reviews, 9(2), 229-236
Yoo, S.H., (2006). The causal relationship between electricity consumption and economic growth in the ASEAN countries. Energy Policy, 34, 3573–3582
Zhang, X., Han, J., Shihuai, H., Peng, H., Li, Y., Shen, G. and Zhang, Y. (2012). Evaluating the interplays among economic growth and energy consumption and CO2 emission of China during 1990–2007. Renewable and Sustainable Energy Reviews, 16, 65– 72
Zhou, P., Ang, B. W. and Poh, K. L. (2008). A survey of data envelopment analysis in energy and environmental studies. European journal of operational research, 189 (1), 1-18