The relationship between air pollution, fossil fuel energy consumption, and water resources in the panel of selected Asia-Pacific countries

Abstract

The objective of the study is to examine the relationship between air pollution, fossil fuel energy consumption, water resources, and natural resource rents in the panel of selected Asia-Pacific countries, over a period of 1975-2012. The study includes number of variables in the model for robust analysis. The results of cross-sectional analysis show that there is a significant relationship between air pollution, energy consumption, and water productivity in the individual countries of Asia-Pacific. However, the results of each country vary according to the time invariant shocks. For this purpose, the study employed the panel least square technique which includes the panel least square regression, panel fixed effect regression, and panel two-stage least square regression. In general, all the panel tests indicate that there is a significant and positive relationship between air pollution, energy consumption, and water resources in the region. The fossil fuel energy consumption has a major dominating impact on the changes in the air pollution in the region.