Coal consumption and economic growth in South Africa: An empirical investigation. Issue 2 (March 2016)

• Record Type: Journal Article
• Authors: Odhiambo, Nicholas M
• Is Part Of: Energy & environment. Volume 27:Issue 2(2016)
• Page Start: 215
• Page End: 226
• Publication Date: 2016-03
• Subjects: South Africa -- coal consumption -- employment -- economic growth -- ARDL bounds testing approach; Power resources -- Environmental aspects -- Periodicals; Power resources -- Periodicals; Renewable energy sources -- Periodicals; Energy policy -- Environmental aspects -- Periodicals; Ressources énergétiques; Politique énergétique; Energy policy -- Environmental aspects; Power resources; Power resources -- Environmental aspects; Renewable energy sources; Periodicals; 333.7
• DOI: 10.1177/0958305X15627535
• Languages: English
• ISSNs: 0958-305X

Abstract

In this paper, we examine the causal relationship between coal consumption and economic growth in South Africa, which is one of the largest coal producers and consumers in the world. We incorporate employment as an intermittent variable between coal consumption and economic growth – thereby creating a simple trivariate causality model. Using the ARDL bounds testing approach, we find that there is a unidirectional causal flow from economic growth to coal consumption in South Africa – both in the short run and in the long run. The results also show that there is a short-run unidirectional causal flow from coal consumption to employment, as well as a bidirectional causality between economic growth and employment. The study, therefore, concludes that for South Africa, it is economic growth, which Granger-causes coal consumption, and not vice versa. This implies that coal conservation could be achieved in South Africa – without necessarily compromising economic growth.