The Effect of Economic Growth and Energy Consumption on Carbon Dioxide Emissions in 14 Selected East African Countries: Evidence from Panel-Ardl
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Date
2019-06
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Addis Ababa University
Abstract
The study analyzed the effect of economic growth, energy consumption, population density and urbanization on carbon dioxide emission in 14 selected East African countries, with the main interest of the effect of energy consumption and economic growth over the period 1980 to 2016, except for Ethiopia (1981-2016), Tanzania (1988-2016) and Uganda (1982-2016). In doing this, the study used Panel-Autoregressive Distributive Lag (Panel-ARDL), model. Result of panel unit root tests revealed the model variables have a mixed order of integration (or I (0) and I (1)) and none of them I (2). Result of co-integration tests confirmed the existence of long-run co-integrating relationship among the model variables. Pooled mean group estimation result shows all the model explanatory variables were statistically significant in the long-run to explain the variance of carbon dioxide emission for the analyzed countries. The result shows energy consumption, growth in output, population density and urbanization leads to an increase in emission of the gas in the long-run. Energy consumption and economic growth also found significant and have a positive impact in the short-run too, while urbanization found significant and have a negative impact yet it is in a statistical sense. The population density was found insignificant in the short-run. Hence, the study recommended the governments and policymakers in the analyzed countries to develop and implement long-term energy, economic and demographic policies such as switching to cleaner energy alternatives like wind, hydro, biogas, biofuels and solar, green investment in the field of green technologies in order to lower the opportunities of future carbonization of the economic structure, and controlling the rate of population via intervention mechanism like women empowerment, improving girl education as well as creating awareness on negative effect of having a large family size.
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Dynamic fixed effect, Economic growth, Energy consumption, Population density