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The Impact of Economic Growth on CO2 Emissions in Azerbaijan

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  • Jeyhun I. Mikayilov
  • Marzio Galeotti
  • Fakhri J. Hasanov

Abstract

This paper examines the relationship between the economic growth and CO2 emissions in Azerbaijan.A cointegration analysis is conducted over the period 1992-2013. For getting more robust results, Johansen, ARDLBT, DOLS, FMOLS and CCR methods to explore cointegration and estimate longrun coefficients are employed. We use cubic, quadratic and linear specifications and conclude that the last one is an adequate representation for the impact of the economic growth on CO2 emissions in Azerbaijan. The results from the different cointegration methods are consistent with each other and show that the economic growth has positive and significant impact on the emissions in the long-run implying that the EKC hypothesis does not hold for Azerbaijan. Moreover, we find that any short-run disequilibrium can be corrected towards the long-run equilibrium path within less than one year. The paper concludes that increasing the energy efficiency can be considered as a relevant environmental policy in order to reduce the carbon emissions.

Suggested Citation

  • Jeyhun I. Mikayilov & Marzio Galeotti & Fakhri J. Hasanov, 2018. "The Impact of Economic Growth on CO2 Emissions in Azerbaijan," IEFE Working Papers 102, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
  • Handle: RePEc:bcu:iefewp:iefewp102
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    Keywords

    CO2 emissions; cointegration; economic growth; EKC hypothesis; Azerbaijan;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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