Nexus between energy pricing and carbon emission. A policy mix response of developing economies

Figures & data

Table 1. Variable description and data sources.

Variables	Description	Measurement	Data source
Household consumption	(HC)	Household final consumption as a % of GDP.	World Development Indicator (WDI) 2020 & OECD
Carbon dioxide emissions	(CO2)	Value-added	International Energy Agency (IEA), 2020
Energy (fuel) prices	(EP)	Fuel price (US$ per liter)	German Agency for International Cooperation (GIZ).
Per capita income	(PCI)	Adjusted net national income per capita (annual % growth)	World Development Indicator (WDI) 2020
Tax rate	(TAX)	Taxes on income, profits, and capital gains (% of total taxes)	IMF, International Financial Statistics
Inflation rate	(INF)	Inflation, consumer prices (annual %)	IMF, International Financial Statistics

For this table, last column provide the comprehensive detail of all sources where the dataset have been generated.

Table 2. Shapiro–Wilk W test for normal data.

Variable	Obs	W	V	z	Prob > z
HC	186	0.94	8.22	4.83	0
EP	186	0.89	15.33	6.25	0
PCI	186	0.92	9.84	5.24	0
CO2	186	0.51	67.76	9.66	0
INF	186	0.89	15.01	6.20	0
TAX	186	0.89	14.05	6.05	0

Authors calculations based on STATA.

Table 3. V.I.F. and Breusch–Pagan/Cook–Weisberg test for heteroskedasticity.

Variance inflation factor (VIF)
Variable	VIF	1/VIF
TAX	1.17	0.85
EP	1.16	0.85
PCI	1.13	0.88
CO2	1.12	0.89
INF	1.09	0.91
Mean VIF	1.14
Breusch–Pagan/Cook–Weisberg test for heteroskedasticity
Number of instruments = 165			Wald chi2(6) = 131.01
Prob > chi2 = 0.0000
Ho:	Constant variance
Variables:	fitted values of hc
chi2(1)	2.23
Prob > chi2	0.13

Authors calculations based on STATA.

Table 4. Results of unit root tests.

Test based on CIPS
Variable	LEVEL		First difference		Order of integration
	Intercept	Trend and intercept	Intercept	Trend and intercept
HC	−3.39*	−3.15**	−6.82*	−4.97***	I(0)
EP	−0.75	−3.03***	−5.70*	−5.39***	I(0)
PCI	−2.19**	−1.46	−5.69*	−2.81***	I(0)
CO2	−2.09	−2.37	−4.23*	−3.40***	I(0)
INF	−3.26**	−3.55***	−3.49*	−5.19***	I(0)
TAX	−2.30*	−3.52***	−6.25*	5.59***	I(0)

H₀: indicates the stationary data set that is the null hypothesis (absence of unit root).

Critical values are 10%, 5%, and 2%, and values of LM less than critical values indicate the acceptance of H_o (null hypothesis). This is again the case data set has no unit root.

***, **, * Significant at 1%, 5%, and 10% level of significance.

Authors calculations based on STATA.

Table 5. Long-run results of regression.

Results of fixed effect model
Dependent variable: HC
	EP	PCI	CO2	INF	TAX	Cons
Coef.	0.3982***	0.4468***	0.5300***	0.5479***	−0.1378***	75.0163***
Std. Err.	0.1050	0.1010	0.1100	0.0903	0.0592	1.9616
t	3.9300	4.4200	0.0100	6.0800	−2.3200	38.2400
P>|t|	0.0040	0.0000	0.5780	0.0000	0.0210	0.0000
[95% Confidence Interval]	1.5721	0.64619	−4.3300	−0.3708	−0.2547	71.1449
	4.3686	0.24752	2.4200	0.7250	−0.0208	78.8878

Authors calculations based on STATA.

***, ** represent the significance level at 1% and 5%, respectively.

Table 6. Results of country-wise P.Q.R.

Quantiles	Variables	Bangladesh	Bhutan	India	Nepal	Pakistan	Sri Lanka
τ = 10^th	CO2	−0.147***	0.216***	0.320***	0.256***	0.267***	0.357***
	FP	0.091***	0.073***	0.252***	0.480***	0.093***	0.284***
	INF	0.021**	0.085***	−0.016	0.187***	0.062	0.01
	PCI	−0.005	0.030***	−0.045	−0.054***	−0.013	0.031
	TAX	−0.019	−0.459***	−0.133	0.517	0.245	0.194
τ = 20^th	CO2	−0.149***	0.442***	0.315***	0.305***	0.232***	0.360***
	FP	0.094***	0.501***	0.278***	0.490***	0.074***	0.358***
	INF	0.022**	0.131***	−0.033	0.367***	0.041	−0.004
	PCI	−0.005	0.031	−0.043	0.131***	−0.007	0.029
	TAX	−0.02	0.137	−0.109	0.326	0.36	0.188
τ = 30^th	CO2	−0.138***	0.436***	0.296***	0.295***	0.318***	0.294***
	FP	0.083***	0.544***	0.277***	0.402***	0.095***	0.339***
	INF	0.021**	0.099	0.001	0.316***	0.029	0.087
	PCI	−0.001	−0.039	−0.017	−0.071	−0.005	0.023
	TAX	0.003	0.199	−0.056	0.405	0.125	0.36
τ = 40^th	CO2	−0.137***	0.379***	0.255***	0.316***	0.319***	0.300***
	FP	0.081**	0.511***	0.364***	0.375***	0.099***	0.333***
	INF	0.021***	0.154***	−0.023	0.383***	0.037***	0.061
	PCI	−0.001	−0.051	−0.008	−0.099	−0.005	0.026
	TAX	0.001	0.285	0.098	0.333	0.121	0.368
τ = 50^th	CO2	−0.136***	0.371***	0.266***	0.277***	0.310***	0.319***
	FP	0.086***	−0.503***	0.349***	−0.402***	0.096***	0.326***
	INF	0.022***	0.166	−0.031	0.382***	0.041***	0.06
	PCI	−0.001	−0.056	−0.007	−0.086	−0.044	0.006
	TAX	−0.001	0.298	0.065	0.439	0.144	−0.323***
τ = 60^th	CO2	−0.131***	0.408***	0.308***	0.252	0.320***	0.204***
	FP	0.082***	0.468***	0.275***	0.464***	−0.090***	0.360***
	INF	0.020***	0.176***	−0.031	0.429***	0.045***	0.037
	PCI	−0.001	0.065***	−0.012	−0.064	−0.041	0.003
	TAX	−0.006	0.256	−0.074	0.474	0.116	−0.724***
τ = 70^th	CO2	−0.131***	0.326***	0.304***	0.363***	0.319***	0.212***
	FP	0.083***	0.500***	0.284***	0.428***	0.090***	−0.425***
	INF	0.020***	0.079	−0.049	0.357***	0.055***	0.033
	PCI	−0.001	−0.066***	0	−0.068	−0.008	0.024
	TAX	−0.006	0.435***	−0.054	0.241	0.119	−0.687***
τ = 80^th	CO2	−0.133***	0.309***	0.328***	0.387***	0.370***	0.211***
	FP	0.083***	−0.553***	−0.257***	0.409***	0.104***	0.329***
	INF	0.013	0.064	−0.032	0.359***	0.055***	0.127
	PCI	0	−0.049	0.003	−0.076	−0.007	0.016
	TAX	−0.014	0.464	−0.149	0.184	−0.025	−0.663***
τ = 90^th	CO2	−0.139***	0.377***	0.334***	0.618***	0.36474***	0.347***
	FP	0.092***	0.477***	0.257***	0.331***	0.114***	0.344***
	INF	0.006***	0.235	−0.043	0.315***	0.014***	0.185
	PCI	0.001	−0.018	0.007	−0.1	−0.009	0.028
	TAX	−0.017	0.296	−0.165	−0.368	0.011	−0.186***

Authors calculations based on STATA.

Table 7. Results of Granger causality.

Hypothesis	Overall Panel	Bangladesh	Bhutan	India	Nepal	Pakistan	Sri Lanka
C02 does not Granger Cause HC	0.29	2.72	0.64	0.35	2.38	11.39***	5.89***
HC does not Granger Cause C02	0.11	2.14	0	4.20***	4.82***	1.48	0.11
FP does not Granger Cause HC	0.08	1.18	0.68	1.2	4.74***	3.60***	13.48***
HC does not Granger Cause FP	0.3	2.58	0	2.17	0.61	1.18	0.03
INF does not Granger Cause HC	0.14	0.13	1.58	2.82	0.11	0.64	0.27
HC does not Granger Cause INF	0.23	1.2	0.33	0.08	0.12	0.16	1.57
PCI does not Granger Cause HC	0	1.34	0.49	0.22	0.34	5.13***	0.64
HC does not Granger Cause PCI	5.92***	8.04***	1.47	3.96***	3.11***	0.04	0.72
TAX does not Granger Cause HC	0.46	3.85***	0.38	0.01	1.45	3.62***	3.36***
HC does not Granger Cause TAX	0.79	0.55	0.65	5.56***	2.28	0.36	8.82***
FP does not Granger Cause C02	0.15	1.45	2.4	0.72	0.2	0	0.02
C02 does not Granger Cause FP	0.34	6.35***	0.2	2.06	2.14	5.24***	5.83***
INF does not Granger Cause C02	1.17	0.95	0.46	2.48	0.22	0.01	0.03
C02 does not Granger Cause INF	0	1.47	7.26***	0.53	1.36	0.01	4.11***
PCI does not Granger Cause C02	0.01	0.35	1.79	0.4	2.47	2.34	0.06
C02 does not Granger Cause PCI	0.01	8.19***	4.69***	4.82***	0.04	0.08	0.13
TAX does not Granger Cause C02	0	0.01	1.24	4.09***	1.12	0.07	0.28
C02 does not Granger Cause TAX	0.4	0.02***	0.04	0.7	1.25	0	6.45***
INF does not Granger Cause FP	0.07	2.7	5.09***	0.01	0.18	0	0.36
FP does not Granger Cause INF	0.76	0.87	1.75	0.03	0.13	0.15	6.50***
PCI does not Granger Cause FP	5.34***	6.24***	0.67	2.03	3.70***	1.04	0.31
FP does not Granger Cause PCI	5.04***	1.92	1.1	4.24***	1.43	0.46	0.75
TAX does not Granger Cause FP	1.34	2.78	5.10***	10.64***	1.59	1.72	0.65
FP does not Granger Cause TAX	0.87	1.22	0.22	2.42	0.91	0.16	8.30***
PCI does not Granger Cause INF	0.22	0.03	0.06	1.73	0.22	0.72	0.27
INF does not Granger Cause PCI	0.01	2.55	2.11	0.27	0.68	0.07	0.31
TAX does not Granger Cause INF	0.67	1.71	2.07	0.13	1.03	0.06	1.35
INF does not Granger Cause TAX	3.00***	2.43	0.4	0.62	1.56	2.71	0.08
TAX does not Granger Cause PCI	0.39	0.07	2.86	6.87***	0.47	0.13	1.22
PCI does not Granger Cause TAX	0.67	0.55	18.05***	0.22	0.88	1.31	0.04

Authors calculations based on STATA.

Table 8. Hausman, Breusch, and Pagan Lagrangian multiplier test for model validation.

Hausman test
chi2(4) = (b-B)'[(V_b-V_B) ^ (-1)] (b-B) = 17.1
Prob > chi2 = 0.0018
Ho = Fixed effect is an appropriate model
Ha = Random effect is an appropriate model
Breusch and Pagan Lagrangian multiplier test
	Var	Sd = sqrt (Var)
HC	114.714	10.71048
e	21.846	4.673974
u	0	0
Var(u)		0
Chibar2(01)		0
Prob > chibar2		1

Authors calculations based on STATA.

Table 9. Results of selected indicators based on the T.O.P.S.I.S. method.

Performance of countries in selected indicators
Countries	1990	1995	2000	2005	2010	2015	2020
Bangladesh	0.60	0.57	0.63	0.59	0.67	0.75	0.74
Bhutan	0.57	0.52	0.86	0.71	0.79	0.78	0.76
India	0.44	0.43	0.46	0.58	0.47	0.44	0.33
Nepal	0.54	0.59	0.61	0.62	0.70	0.68	0.70
Pakistan	0.57	0.61	0.67	0.73	0.71	0.83	0.81
Sri Lanka	0.47	0.52	0.57	0.55	0.72	0.72	0.72

Authors calculations based on STATA.

Figure 1. Cumulative score of South Asian based on T.O.P.S.I.S.

Authors calculations based on STATA.