An Econometric Study of Economic Growth, Energy and Exports in Mauritius: Implications for Trade and Climate Policy

Authors

  • Riad Sultan University of Mauritius

Abstract

While electricity from fossil fuels is among a major source of greenhouse gases and global warming, it is also a key resource in the industrial sector geared towards exports and economic growth. This study attempts to examine the export-GDP nexus and electricity-GDP nexus in addition to a supplementary hypothesis between exports and electricity in Mauritius for the period of 1970-2009. An augmented neo-classical aggregate production model is used. The ARDL bounds test and the Johansen cointegration test confirm the existence of a long-run relationship between these variables. The multivariate Granger-causality analysis indicates that electricity and exports Granger-cause economic growth in the long-run. Electricity remains a significant causal variable in the short-run and is also found to lead exports. The empirical findings suggest that conserving electricity as a climate policy may not be conducive for exports and economic growth. The use of renewable sources for electricity may be the right option.Keywords: Growth; Exports; Electricity; Granger causality; Climate policyJEL Classifications: Q37; Q43; Q48

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Author Biography

Riad Sultan, University of Mauritius

Lecturer in environmental and resource economicsDepartment of Economics and StatisticsFaculty of Social Studies and HumanitiesUniversity of Mauritius

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Published

2012-08-16

How to Cite

Sultan, R. (2012). An Econometric Study of Economic Growth, Energy and Exports in Mauritius: Implications for Trade and Climate Policy. International Journal of Energy Economics and Policy, 2(4), 225–237. Retrieved from https://econjournals.com/index.php/ijeep/article/view/254

Issue

Vol. 2 No. 4 (2012)

Section

Articles

License

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