Energy Policy Recommendations for ASEAN Countries: Empirical Evidence from the Bootstrap Panel Granger Causality Analysis

Abstract

In social sciences, especially in the economic literature, energy has been one of the most important topics. Energy seems to be dominant on the political and economic agendas because of nearly all economic activities linked to energy. Hence, all economies have endeavored to detect and implement policies to increase their efficiency and mitigate energy’s detrimental effects on the earth. This study’s principal mission is to check the connection between economic growth, non-renewable and renewable energy consumption in ASEAN-5 countries over 1990–2014 to recommend energy-saving policies. Within this view, bootstrap panel Granger causality test is applied. The model results indicate that economic growth causes renewable energy consumption in the Philippines and economic growth induces non-renewable energy consumption in Indonesia and Malaysia. A unidirectional causality relationship operating from renewable energy consumption to economic growth is approved for Brunei Darussalam. Finally, a unidirectional causality relationship working from renewable energy consumption to Brunei Darussalam’s economic growth is confirmed.