Abstract:
This study reexamines the causal link between electricity consumption, economic growth and
CO2 emissions in the BRICS countries (i.e., Brazil, Russia, India, China, and South Africa)
for the period 1990-2010, using panel causality analysis, which accounts for dependency and
heterogeneity across countries. Regarding the electricity-GDP nexus, the empirical results
support evidence on the feedback hypothesis for Russia and the conservation hypothesis for
South Africa. However, a neutrality hypothesis holds for Brazil, India and China, indicating
neither electricity consumption nor economic growth is sensitive to each other in these three
countries. Regarding the GDP-CO2 emissions nexus, a feedback hypothesis for Russia, a oneway
Granger causality running from GDP to CO2 emissions in South Africa and reverse
relationship from CO2 emissions to GDP in Brazil is found. There is no evidence of Granger
causality between GDP and CO2 emissions in India and China. Furthermore, electricity
consumption is found to Granger cause CO2 emissions in India, while there is no Granger
causality between electricity consumption and CO2 emissions in Brazil, Russia, China and
South Africa. Therefore, the differing results for the BRICS countries imply that policies
cannot be uniformly implemented as they will have different effects in each of the BRICS
countries under study.
