Exploring the Relationship Between CO2 Emissions and Fuel Consumption in Road Transport: Empirical Evidence from Chad

Abstract

Over the period 2008-2019, this study examines the linear impact of petroleum product (PP) consumption in Chad, PP prices, the vehicle fleet and urbanisation on CO2 emissions on the one hand, and on the other, it determines the causal links that exist between the various variables studied. This study opts for the augmented Dickey-Fuller and Phillips-Perron tests to verify the stationarity of the variables. The ARDL model is then estimated and diagnostic tests are performed to confirm the validity of the model. To confirm the existence of long-term relationships, the bounds test was applied. Finally, the Toda-Yamamoto causality test was used to capture the influences present between the series under study. The main results show that, in the long term, a 1% increase in gasoline consumption would lead to a 1.03% increase in CO2 emissions and the linear impact of diesel consumption is positive and insignificant on CO2 emissions. In the short term, gasoline and diesel consumption have a positive and insignificant impact on CO2 emissions. In terms of causality, there is a unidirectional causality from gasoline consumption to CO2 emissions and a bidirectional causality between CO2 emissions and diesel consumption. This study is the first to simultaneously link CO2 emissions, PP consumption, PP prices, the vehicle fleet and urbanisation in general, and particularly in the case of Chad. It therefore adds to the literature on the simultaneous relationship between CO2 emissions, PP consumption, the car fleet and urbanisation in a global and restricted context. This study could guide Chadian oil pollution management decision-makers in adopting policies related to the effects of PP consumption in the road transport sector.