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Is there a similar Granger causality among CO2 emissions, energy consumption and economic growth in different regimes in Iran?

Author

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  • Arash Refah-Kahriz

    (Urmia University)

  • Hassan Heidari

    (Urmia University)

  • Mahdiyeh Rahimdel

    (Urmia University)

Abstract

The primary aim of this study is that whether Granger causality (GC) among CO2 emissions, energy consumption (EC) and economic growth (EG) in different regimes in Iran is similar and sustainable. We answer this question using Markov Switching Vector Autoregressive (MS-VAR) approach and the quarterly data from 1970Q1 to 2015Q4. The findings show that the causal relationship switches among these variables in different regimes. In the first regime, the results show a positive unilateral GC from EG to EC. In the second regime, the study shows a negative GC from EC to EG, and a positive causality from EG to EC, and a negative unilateral causality from CO2 emissions to EG. The results indicate no causality from EG and EC to CO2 emissions in the first and second regimes. The results further show that the probability of sustainability in this first regime, where the rate of EG is at a low level but the amounts of EC and CO2 emissions are at a high level, will be high compared to the second regime. These findings call for more attention to the various effects of these variables on each regime before the policy implementation.

Suggested Citation

  • Arash Refah-Kahriz & Hassan Heidari & Mahdiyeh Rahimdel, 2023. "Is there a similar Granger causality among CO2 emissions, energy consumption and economic growth in different regimes in Iran?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(4), pages 3801-3822, April.
    • Handle: RePEc:spr:endesu:v:25:y:2023:i:4:d:10.1007_s10668-022-02203-y
    DOI: 10.1007/s10668-022-02203-y
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