A collaborative research effort, including researchers Ali, Seraj, Alper, Tursoy from Near East University, has examined the intricate relationship between economic growth, energy prices, and coal consumption in the context of the ongoing conflict between Russia and Ukraine. With Russia being a major supplier of oil and gas to Europe, the study sought to analyze the potential implications of the conflict on energy dynamics in top European importers, namely Poland, the Netherlands, Hungary, and Germany.
Employing advanced econometric techniques such as modified ordinary least squares (FMOLS), dynamic ordinary least squares (DOLS), and canonical cointegration regression (CCR), the study investigated the elasticity of coal consumption demand with respect to economic growth and fluctuations in coal, oil, and gas prices. Utilizing quarterly data from Q1 2016 to Q2 2022, the study also incorporated a dummy variable representing the onset of the Russia-Ukraine conflict in February 2022.
Results revealed a nuanced relationship between economic factors, energy prices, and coal consumption across the studied nations. While economic growth and coal prices exhibited an inverse association with coal consumption in all four countries, shocks in gas and oil prices brought volatility to coal demand, with increases in gas and oil prices generally reducing coal consumption. Interestingly, the impact of the war conflict varied, with Poland experiencing a positive effect, while effects in the Netherlands, Hungary, and Germany were insignificant under certain models.
Based on these findings, the study proposed policy implications for the studied nations, emphasizing the need for proactive measures to address energy security and mitigate the environmental impact of coal consumption. Recommendations included diversification of energy sources, investment in renewable energy infrastructure, and fostering international cooperation to reduce dependence on Russian fossil fuels.
In conclusion, this collaborative research effort sheds light on the complex interplay between economic factors, energy prices, and geopolitical conflicts in shaping energy dynamics in Europe. By providing valuable insights into the elasticity of coal consumption demand and the impact of the Russia-Ukraine conflict, the study informs policymakers and stakeholders in navigating the transition towards more sustainable and resilient energy systems.
More Information:
https://link.springer.com/article/10.1007/s11356-023-29308-9
