Carbon emissions, energy consumption and economic growth: a causality evidence

Abstract

Recently, there has been a growing interest on environmental issues, due to climatic-based problems associated with escalated levels of pollution and degradation of the environmental quality. This is widely believed to be caused by increased economic and human activities. The primary focus of this paper is to examine the causal and long-run relationship between carbon emissions, energy consumption and economic growth for Iraq. We apply the bounds test for cointegration and Toda-Yamamoto for a Granger causality test using annual data for the period from 1972 to 2013. The sample coverage is restricted by data unavailability. Empirical results propose unidirectional causality running from economic growth to energy consumption and from carbon emissions to energy consumption in the long-run. Findings reveal that there is no feedback relationship between economic growth, carbon emissions and energy consumption of Iraq.