Energy Consumption and Carbon Dioxide Emission Using Spatial Panel and Economic Complexity Approach: A Case Study of OPEC Member Countries

Document Type : Research Paper

Authors

1 M.A. Theoretical Economics, Islamic Azad University, Tabriz Branch, Tabriz, Iran

2 Assistant Professor, Payamnoor University, Tehran, Iran

3 M.A. Economic Development and Planning, Ahvaz University, Ahvaz, Iran

Abstract

Economic complexity is an indicator of technological advancement, accumulation of knowledge and product diversity in the production of a country and is an indicator of the level of prosperity and development. In this process, the relationship between carbon dioxide emissions and environmental damage, energy consumption and economic complexity of countries are among the existing top challenges. This study examines the relationship between economic complexity, energy consumption and carbon dioxide emissions in OPEC countries. To achieve this goal, the dynamic space panel approach is used for the period 1995-2017. The findings show that energy consumption has a positive and significant relationship with carbon dioxide emissions. This means that due to the lack of advanced technology in OPEC member countries they experience high energy intensity. Moreover, since their main energy consumption is based on fossil fuels they have a high level of pollution. There is also a direct and significant relationship between economic complexity and carbon dioxide emissions. Given that most OPEC members are in the early stages of development, an increase in carbon dioxide emissions is not unexpected.

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