Abstract
Azerbaijan signed the Paris Agreement in 2016 and committed to cut greenhouse gas (GHG) emissions by 35% in 2030. Meanwhile, natural gas has been vital component in the total energy mix of Azerbaijan economy and accounted for almost 65% of the total energy consumption. In the overall electricity mix, natural gas-fired power plants generate 93% of the country’s electricity. Since global energy consumption is responsible for 73% of human-caused greenhouse-gas emissions, and CO2 makes up more than 74% of the total, this study investigates possible mitigation effects of the natural gas consumption on CO2 emissions for Azerbaijan. Author employed several cointegration methodologies, namely Bound testing Autoregressive Distributed Lag (ARDL) approach, Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and Structural Time Series model (STSM). Author of this paper found that when the share of natural gas increases 1 percent in the total energy mix, CO2 emission per capita decreases approximately 0.14 percent as a result of the ARDL, FMOLS, and DOLS models. All three models provide cointegration between the share of natural gas in the total energy mix and reduction in CO2 emissions.
Highlights
Global energy consumption is responsible for 73% of human-caused greenhousegas emissions
CO2 makes up more than 74% of the total, this study investigates possible mitigation effects of the natural gas consumption on CO2 emissions for Azerbaijan
Author of this paper found that when the share of natural gas increases 1 percent in the total energy mix, CO2 emission per capita decreases approximately 0.14 percent as a result of the Autoregressive Distributed Lag (ARDL), Fully Modified Ordinary Least Squares (FMOLS), and Dynamic Ordinary Least Squares (DOLS) models
Summary
Global energy consumption is responsible for 73% of human-caused greenhousegas emissions. To keep the global temperature increase to less than 1.5 degrees Celsius, United Nations Environment. UNEP [4], estimates annual necessary decline in global GHG emission should be. 7.6 per cent every year throughout 2020–2030. For a goal of limiting the global temperature increase to 2 degrees Celsius; a drop in emissions for the same period must be 2.7 per cent per year. Considering these blunt realities, Cohen [5], Xu and Lin [6] propose natural gas as a greener fossil fuel, attracting attention during The 21st Conference of the Parties (COP21)
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