Does Energy Intensity Contribute to CO2 Emissions? A Trivariate Analysis in Selected African Countries

The present study investigates the dynamic relationship between energy intensity and CO2 emissions by incorporating economic growth in environment function using data of Sub Saharan African countries. For this purpose, we applied panel cointegration to examine the long run relationship between the series. We employ the VECM Granger causality to test the direction of causality between the variables. At panel level, our result validates the existence of cointegration among the series. The long run panel results show that energy intensity has positive and statistically significant impact on CO2 emissions. There is also positive and negative link of non-linear and linear terms of real GDP per capita with CO2 emissions supporting the presence of environmental Kuznets curve (EKC). The causality analysis reveals the bidirectional causality between economic growth and CO2 emissions while energy intensity Granger causes economic growth and hence CO2 emissions, while across the individual countries, the results differ. This paper opens up new insights for policy makers to design comprehensive economic, energy and environmental policy for sustainable long run economic growth.