The present study aims to scrutinize the long- and short-run relationship along with the direction of causality among environmental pollution (CO2), renewable, non-renewable energy, income disparity, exchange rate, and poverty alleviation in E-9 countries of continent Asia, using a panel dataset from 1990 to 2018. The current study used pooled mean group autoregressive distributed lag (PMG ARDL) and Dumitrescu-Hurlin (D-H) causality test after affirming a stable long-run association among environmental pollution and all the explanatory variables. However, ECM (error correction mechanism) was specified to explore short-run dynamics. The study's outcomes confirmed strong co-integration among environmental pollution (CO2), renewable, non-renewable energy, income disparity, exchange rate, and poverty alleviation. Moreover, uni (bi) directional causality runs from non-renewable energy, exchange rate, and income disparity (poverty alleviation and renewable energy) to environmental pollution (CO2). Results also revealed that poverty alleviation, exchange rate, and renewable energy usage substantially negatively influence environmental pollution (CO2). Contrarily, income disparities and non-renewable energy usage positively influence long- and short-run environmental pollution. Therefore, from the policy perspective, the current study focused on twofold; first, there is a desire to alleviate poverty, the decline in non-renewable energy use and income disparity among upper and lower-income quintiles. Second, boost exchange rate and renewable energy use to control environmental pollution in the described least developed countries (LDCs).
Keywords: Environmental pollution; Income disparity; Non-renewable energy; PMG-ARDL; Poverty alleviation; Renewable energy.
© 2022. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.