Development Economics
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Browsing Development Economics by Author "Alemu Tekie"
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Item The Dynamic Relationship between Carbon Dioxide Emission, Energy Consumption, Economic Growth and Foreign Direct Investment An ARDL Approach.(Addis Ababa University, 2016-06) ketsela Dagmawit; Alemu TekieIn this paper the main objective of the study was to assess the dynamic relationship between CO2 emission, economic growth, energy consumption and Foreign direct investment from the year 1973/4- 2011/12 E.C by using ARDL approach based on secondary data obtained from both published and unpublished document from concerned organizations of World Development Indicators the official website of World Bank, UNCTAD stat and from national bank of Ethiopia. Co-integration test approves the existence of one co-integrating equation .It is found that CO2 emissions, energy consumption, economic growth, and foreign direct investment are co-integrated. The pair wise Granger causality test between foreign direct investment and carbon dioxide emission suggested that Granger causality runs one way from carbon dioxide emission to Foreign direct investment which implies that the relatively lower environmental standards has attracted foreign direct investment .There is bidirectional causality between real GDP per capita and energy consumption and there is unidirectional causality between energy consumption and CO2 emission Whereas there is no causality between CO2 and economic growth. In order to reduce CO2 emission Ethiopia should implement strategy of increasing the level investment in energy infrastructure and a need for proper utilization of resources. The implementation of more severe laws that require the usage of energy efficient technologies such as hydro and geo thermal energies and supplying them at affordable price should reduce CO2 emission level. Ethiopia should attract FDI inflow in order to reduce the level of emission