Nexus of Electricity Consumption, Economic Growth and CO2 Emissions: Evidence from Low and High-Income Countries

Using data from global low and high-income countries over 35 years (from 1980 to 2014), we tried to find the correlations between electricity consumption, economic development, and CO2 emissions by employing the PVAR (Panel Vector Auto Regressive) model, impulse response function, and variance decomposition method. It demonstrates that electricity consumption and CO2 are Granger reasons for economic growth in the two group countries, but GDP and CO2 emissions can only guide the exploration of electricity energy in high-income countries. Technological differences between the two groups of countries lead to different costs in energy usage; low-income countries are unable to carry out electric energy innovation and revolution while high-income countries can. For sustainable development, lowincome countries should pay attention to the development and application of energy technologies, but not only GDP.