The effect of urbanization on CO2 emissions in Vietnam - Approached by the autoresgressive distributed lag model (ARDL)

Abstract

This paper examines the effect of urbanization on CO2 emissions in Vietnam from 1986 to 2021. By applying the Autoregressive Distributed Lag model (ARDL) to co-aggregation, the study analyzes both short-run and long-term relationship between urbanization and emissions. The research is based on time series data collected from reputable organizations around the world (World Bank - WB, World Energy Analysis Agency - IEA). Two control variables, average GDP per capita and technological progress (measured through the total number of patent applications by residents and non-residents) are included in the analysis model. The results show that there is a cointegration relationship between the variables. Urbanization increases emissions in both the short and long term. In addition, GDP per capita and the number of patent registrations (representing the technological innovation variable) are found to change the degree of impact of urbanization on CO2 emissions in both the short and long run. Thereby, the findings provide implications in increasing the level of urbanization associated with sustainable economic development based on the application of green technology in the economy.