Does biomass energy consumption mitigate CO₂ emissions? The role of economic growth and urbanization: evidence from developing Asia

This study investigates the relationship among CO₂ emissions, biomass energy consumption, economic growth and urbanization for a panel of 13 Asian developing countries. The panel cointegration tests suggest that there is a long-run equilibrium relationship among CO₂ emissions, biomass energy consumption, economic growth and urbanization. The findings from the FMOLS estimation indicate that overall biomass energy consumption cannot reduce CO₂ emissions. The results of panel causality tests show that there is a short-run unidirectional causality running from GDP to biomass energy consumption and a short-run one-way causality running from GDP and urbanization to CO₂ emissions, respectively. As for the long-run relationship, the findings indicate that there is unidirectional causality running from CO₂ emissions, biomass energy consumption and urbanization to GDP, respectively, implying that real GDP could play a key role in the adjustment process as the system departs from long-run equilibrium.