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This paper examines the effect of remittance income on energy consumption and the economy between 1976 and 2019 in the four highest remittance recipient nations of South Asia. The detailed analysis explores long-run and directional relationships utilizing stationary tests, the panel cointegration test, dynamic ordinary least square (DOLS), fully modified ordinary least square (FMOLS), and Granger causality tests using a Vector Error Correction Model (VECM). The study reveals the presence of long-run relationships among remittances, energy consumption, GDP and urbanization. Cointegrating regression identifies that remittance income, economic growth and urbanization individually have a positive and significant effect on energy consumption in the long-run. Results showed that a 1% increase in remittance income results in a 0.045% increase in energy consumption. Among nations analyzed, this effect was found to be strongly dominant in case of Bangladesh and Pakistan. The statistically significant and negative coefficient of the error correction term confirms long-run causality from remittance, GDP, and urbanization toward energy consumption. Variance decomposition analysis demonstrated that energy usage is heavily impacted by remittance inflows among studied variables. Policy implications of this study suggest that higher remittance inflows will increase energy consumption in South Asian countries, engendering positive economic growth and sustainable development. Image 1 • The effects of remittance on energy consumption studied for South Asian countries. • Novel statistical approaches applied to explore the causality and direction between remittance income and energy use. • Remittance income provides a potential stimulus toward national investments and ensures reliable and clean energy sources. • It is evidence that 1% raise in remittance income results in a 0.045% increase in energy consumption in the long run. • Policy makers can formulate strategic plans for migrant workers to ensure affordable clean energy. [ABSTRACT FROM AUTHOR]

Planning process focusing on Energy-Environment-Economy nexus heavily relies upon the results of causality studies for policy and decision guidance. These studies are mostly aimed to determine the true direction of the causal-path among key variables such as energy consumption, economic growth and GHGs emissions. However, there are some weak points attached to already available methods and their variants such as Granger type causality tests and Peter and Clark (PC) algorithms based on Graph theoretic approach. Swanson and Granger (1997) [89] used the vector autoregressive (VAR) residuals in the PC algorithms to find the causal ordering in time series. However, these residuals carry only contemporaneous information about cross-variable effect and remove the past information. This study modified the original PC algorithms based on modified R-residuals test to analyze the causal relationship between energy consumption, economic growth and GHGs emissions in Pakistan. The results reveal that, unidirectional causality is running from economic growth towards CO 2 emissions. However, no causality is running from energy consumption towards economic growth and vice-versa. This is due to the fact that, a significant portion of energy is consumed in residential and transportation sectors, both of which does not contribute to economic growth in long-run. [ABSTRACT FROM AUTHOR]

This study contributes to the extant literature on the nexus among energy consumption, agriculture, capital and economic growth in Pakistan. We use time series data from 1971 to 2014 and employ the Non-linear Autoregressive Distributed Lag (NARDL) model. The NARDL testing results affirms asymmetric co-integration among the variables. Asymmetric causality is noted between positive shocks in energy consumption and economic growth running from energy consumption to economic growth. A feedback effect is found between agriculture and economic growth for positive shocks. A unidirectional nexus is noted between capital and economic growth for both positive and negative shocks. Similarly, the results of a Granger causality test indicate symmetric causality between energy consumption, agriculture, capital and economic growth. This research suggests that policymakers should revisit their policies regarding agriculture and energy sectors by attracting foreigner investors to build new hydropower dams to both affirm the availability of energy to the industrial sector and control the scarcity of water. • Nonlinear nexus examine among energy, agriculture, capital, and economic growth. • Asymmetric nexus observed for Pakistan over the span of 1971–2014. • We examined asymmetric co-integration among the variables. • Asymmetric growth nexus noted between energy consumption and economic growth. [ABSTRACT FROM AUTHOR]