Open AccessEconomic Growth And Carbon Emissions In South Africa: An Empirical Investigation
Author(s) -
Nicholas M. Odhiambo
Publication year - 2011
Publication title -
the international business and economic research journal/the international business and economics research journal
Language(s) - English
Resource type - Journals
eISSN - 2157-9393
pISSN - 1535-0754
DOI - 10.19030/iber.v10i7.4668
Subject(s) - bivariate analysis , economics , greenhouse gas , granger causality , energy consumption , renewable energy , causality (physics) , natural resource economics , consumption (sociology) , order (exchange) , carbon footprint , ecological footprint , econometrics , macroeconomics , sustainable development , ecology , social science , statistics , physics , mathematics , finance , quantum mechanics , sociology , biology
In this paper we examine the causal relationship between CO2 emissions and economic growth in South Africa - using the newly developed ARDL-Bounds testing approach. We incorporate energy consumption in a bivariate causality setting between CO2 emissions and economic growth, thereby creating a simple trivariate model. Our empirical results show that there is a distinct unidirectional causal flow from economic growth to carbon emissions in South Africa. We also find that energy consumption Granger-causes both carbon emissions and economic growth. We recommend that energy conservation policies, as well as appropriate forms of renewable energy, should be explored in South Africa in order to enable the country to reduce its carbon emission footprint without necessarily sacrificing its output growth. The results apply irrespective of whether the causality is estimated in the short or in the long run.