Economic growth, energy consumption and carbon dioxide emissions: a multivariate cointegration and causality analysis for Central Asian countries

Abstract

Energy plays a vital role in economic development and it is generally considered one of the most important elements of sustainable development. For developing countries especially, economic growth requires an extensive use of energy. Unfortunately, the most abundant from of easily accessible energy is fossil fuels and burning fossil fuels generates waste products. Carbon dioxide (CO2) which comes from consuming fossil fuels such as coal, oil and gas plays a significant role in today’s global warming crisis. Ideally CO2 emissions would be limited, but doing so may impact economic growth and development This study looks at the causal relationships between Economic Growth, Energy Consumption and Carbon Dioxide Emissions for the Central Asian Countries, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, for the period from 1990 to 2012. Johansen cointegration tests and Granger causality tests based on a Multivariate Vector Error Correction Modeling are used to determine the cointegration relationships between these variables.