Measuring the impact of energy consumption and air quality indicators on climate change: evidence from the panel of UNFCC classified countries

Abstract

This study examines the relationship between energy consumption, air pollution, and climate change in the panel of six economically diversified countries classified by the United Nations Framework Convention on Climate Change (UNFCC) as industrialized countries and economies in transition nations by using the panel econometric techniques for the period of 1990-2012. The results of pooled least square regression show that both the energy consumption and air quality indicators have a positive and significant relationship with the climate change, i.e., 1 % increase in energy consumption increases greenhouse gas emissions by 0.124 %, carbon dioxide emissions increase by 0.652 %, methane emissions increase by 0.123 %, and nitrous oxide emissions increase greenhouse gas emissions by 0.105 % age points. The results of fixed-effect regression and random-effect regression confirmed the deteriorating impact of air quality indicators on climate change; however, the results failed to show any significant association between energy consumption and climate change when absorbing country-specific shocks and timevariant shocks during the study time period.