The relationship between energy consumption, CO2 emission, population growth and economic growth: An empirical multivariate causal linkage from Ethiopia

Abstract

This paper empirically researches the short and long-run causal relationship be-tween energy consumption, CO2 emission, population growth and economic growth in Ethiopia. In doing this, the paper employs multivariate Granger-Causality within an ARDL-bounds testing approach to co-integration and unre-stricted error correction model (UECM). The paper finds that there is a short-run impact on population growth and electricity consumption on economic growth whilst in the long run; economic growth promotes CO2 emissions in Ethiopia. And also, the results indicate that population growth and energy usage cause CO2 emis-sion in both the long and the short runs. Thus, policies should be targeted at the expansion of renewable and efficient electricity production in order to cope with the expected demand from expected population growth and from increasing de-mand from industries whilst maintaining sustainable economic growth.