The impact of energy consumption on Carbon Intensity of Human Well-Being (CIWB)

 joint test to 
check whether the dummy variables for all years are equal to zero. The results show that the null 
hypothesis that “all years coefficients are jointly equal to zero” is rejected. This fact shows that 
the period-specific intercepts are significant in the four estimated models. 
Table 2 
The effect of energy consumption per capita (dependent variable is CIWB) 
Independent variables Coefficients 
Panel corrected 
standards errors 
P>|z| 
ECP .2505281 .0102557 0.000 
ECP_2001 .0029104 .0044939 0.517 
ECP_2002 .0105277 .0061022 0.084 
ECP_2003 .0172942 .0076821 0.024 
ECP_2004 . 0055789 .0083684 0.505 
ECP_2005 -.0003515 .0093793 0.970 
ECP_2006 .0278119 .0112643 0.014 
ECP_2007 .010079 .0118724 0.396 
ECP_2008 .0487246 .0126368 0.000 
ECP_2009 .0216888 .0133822 0.105 
ECP_2010 .0276134 .0142494 0.053 
ECP_2011 .0383506 .0143938 0.008 
ECP_2012 .043654 .015168 0.004 
ECP_2013 .0216207 .0163952 0.187 
ECP_2014 .0130358 .0170706 0.445 
ECP_2015 .0155259 .0203723 0.446 
ECP_2016 .0323442 .0234627 0.168 
ECP_2017 .0280184 .0256274 0.274 
ECP_2018 .0122181 .0275986 0.658 
GDP -.6424431 .0691638 0.000 
FDI -.0023558 .0010593 0.026 
Rho 0.87 
R-squared 0.99 
N 171 
Source: The reseacher’s data analysis 
The results from the regression show the effect of per capita energy consumption in the 
reference year 2000 (0.25) and the interaction of per capita energy consumption and the yearly 
dummy variables (2002, 2003, 2006, 2008, 2010, 2011 and 2012) were positive and statistically 
significant. In the remaining years, this interaction is mostly positive but not statistically 
significant. Thus, the relationship between CIWB and energy consumption in these countries is 
positive and appears to vary in magnitude through time. According to Jorgenson and Clark 
(2012); Dietz et al. (2012); Knight and Rosa (2011); Grossman and Krueger (1995) argue that 
the effect of economic performance activity on the environment may change over time. To put it 
Nguyen Thuan, Dang B. Hai. Ho Chi Minh City Open University Journal of Science, 11(1), 19-28 25 
more simply, the energy consumption in low-income countries in the middle-income group is 
creating negative pressure on the environment and changing its magnitude over time. 
To understand the impact of energy consumption on the CIWB, Figure 2 will plot and 
report the coefficients to estimate the influence of energy consumption over the years. The first 
co-efficient (0.25) plotted and presented in Figure 2 is the impact of energy consumption on 
CIWB in 2000 and remained constant through 2001. In 2002 and 2003, the estimated 
coefficients increased by respectively (0.26 and 0.267) and returned to 0.25 in 2004 and 2005. 
During the period from 2006-2011, the estimated coefficient of energy consumption fluctuated 
strongly and tended to increase in absolute value at a higher level than in the period from 2000-
2005. However, in 2005 the estimated coefficient decreased to 0.254 and decreased to 0.25 in 
2013 and unchanged until 2018. 
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 
0.25 0.25 0.26 0.267 0.25 0.25 0.277 0.25 0.298 0.25 0.277 0.288 0.254 0.25 0.25 0.25 0.25 0.25 0.25 
Figure 2. Estimated coefficients of the effect of yearly energy consumption on CIWB 
Regarding the control variables GDP per capita and FDI per capita, there are CIWB 
positive effects and statistically significant. Therefore, these two variables contribute to reducing 
the stresses on the environment by increasing human well-being. 
In summary, our regression results provide a fairly clear picture of the relationship 
between energy consumption and CIWB in the low-income group of middle-income countries. 
We come to two main findings: 
The relationship between energy consumption and CIWB becomes less sustainable. In 
other words, the results indicate that energy consumption creates more stress on the environment. 
In contrast, GDP per capita and FDI per capita have reduced the pressures exerted on the 
environment by increasing human well-being. 
5. Conclusions and policy implications 
The environmental effects of human well-being are seen as a branch of sustainable 
economics. The relationship between economic activity and the environment has attracted the 
attention of scientists for a long time and is divided into two branches: First, the impact of 
economic development or economic activities on the environment. And the second, the study of 
how economic growth can increase human well-being while reducing the pressure on the 
26 Nguyen Thuan, Dang B. Hai. Ho Chi Minh City Open University Journal of Science, 11(1), 19-28 
environment. The studies on carbon intensity on well-being (CIWB) is in the second line of 
sustainable development research. Recently, this direction has attained more interest because 
almost all countries in the world have prolonged development of economics based on energy 
consumption and our world is highly threatened by climate change. 
In order to have a good understanding of the second line of sustainable development, this 
study investigates the relationship on CIWB with economic growth by choosing energy 
consumption as the dependent variable and economic factors like GDP and FDI per capita to be 
control variables. The data of 9 lower middle - income countries have been selected during 2000-
2018 because they have a significant change in policies toward sustainable development under 
the Kyoto protocol since 1997. 
This study reveals the positive effect of energy consumption on CIWB, which means the 
more energy consumes, the more CIWB increases. That indicates the economic development based 
on energy consumption is ineffective on both environment and human well-being. In the other 
hand, the control variables as GDP and FDI per capita have a negatively significant association 
with CIWB, thus, economic growth and attracting FDI have increased human well-being. 
The study contributes to the academic research on sustainable development by showing that 
the withdraw of economic success of those lower middle - income countries when based on energy 
consumption to develop, because of the decline of environment and human well-being. Moreover, it 
also indicates the possible contribution of economic factors as GDP and FDI per capita to 
sustainable development. From the results above, the paper offers the following suggestions: 
Firstly, the use of energy for economic development is ineffective and inconsistent with 
the view of sustainable development. Therefore, it is necessary to issue additional policies to 
limit undesirable outcomes from energy consumption. Besides that, the governments of these 
countries can implement various policies to promote renewable energy technologies such as 
capital subsidies, feed in tariffs, tradable certificates, and renewable portfolio standards. 
Secondly, policies for economic development and FDI attraction are consistent with the 
perspective of sustainable development. However, the impact coefficient of FDI is still relatively 
low. Therefore, it is necessary to apply strict policies for attracting green FDI which reduces 
stress on the environment in the long term. 
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