INVESTIGATION OF CAUSALITY ANALYSIS BETWEEN ECONOMIC GROWTH AND CO2 EMISSIONS: THE CASE OF BRICS – T COUNTRIES

Seyfettin Erdogan,Ayfer Gedikli,Durmuş Çağrı Yıldırım

doi:10.32479/ijeep.8546

Abstract

The most significant cost of increase in economic growth is an increase in energy consumption and carbon emissions as well. Energy consumption triggers carbon dioxide emissions, which is the main cause of environmental pollution. In recent years, struggling with climate changes, global warming and carbon dioxide emissions based environmental problems became critical issues. In doing so, this study investigates the relationship between carbon emissions and economic growth for BRICS-T countries for the period of 1992-2016. We apply Pedroni and, Westerlund and Edgerton panel cointegration approaches for examining cointegration between the variabes. The FMOLS approach is applied for testing long-term relationship between economic growth and carbon emissions. The empirical results indicate that a 1% increase in economic growth increases carbon emissions by 0.79% but 1% increase in carbon emissions leads economic growth by 0.5%. The causality analysis reveals the presence of bidirectional relationship between carbon emissions and economic growth.

Highlights

*This article is an extended version of the paper presented in ENSCON (International Congress of Energy, Economy and Security) held in Istanbul between 10-11 November 2018.". Issues such as global warming and climate changes resulting from environmental pollution because of poisonous gases have been at the top of agenda in national and international levels in recent years
As economic growth is treated as dependent variable, it is seen that cointegration relationship exists following panel v-statistic and rest empirical results show the absence of cointegration between the variables
The empirical results confirm the presence of cointegration between economic growth and carbon emissions

Summary

INTRODUCTION

Issues such as global warming and climate changes resulting from environmental pollution because of poisonous gases have been at the top of agenda in national and international levels in recent years. Et al.: Investigation of Causality Analysis between Economic Growth and CO2 Emissions: The Case of BRICS – T Countries income levels, there will be more environmental expenditures, higher environmental awareness, and demand for qualified and clean environment. Environmental degradation increases at early stages of economic growth, and gradually it starts to decrease as economic growth reaches a better level with a higher income per capita. This shows that pollution or environmental impact per capita is an inverted U-shaped between income per capita and carbon emissions (Shahbaz et al, 2015). This study examines the relationship between economic growth and carbon emissions for BRICS countries including Turkish economy for empirical analysis. A bidirectional relationship between carbon emissions and economic growth is noted

LITERATURE REVIEW

THE DATA AND ESTIMATION STRATEGY

EMPIRICAL ANALYSIS

Method

Findings

CONCLUSION AND POLICY