Energy Use, Economic Growth, and Carbon Dioxide Nexus in Ethiopia: An Auto Regressive Distributed Lag-Bound Test of Co-Integration Analysis

Abstract

Understanding energy, economic growth, and carbon dioxide nexus in Ethiopia help to develop and refine contemporary policies and strategies. This study is used the Auto-Regressive Distributed Lag model to test and analyze data. The finding shows unidirectional and negative causality from the square of per capita gross domestic product to carbon dioxide emission in the short run, while the relationship between carbon dioxide emission and energy use is bidirectional and positive in the long run. Besides, energy use and the per capita gross domestic product bidirectionally related to each other in the short run. Thus, we found that energy is an engine to enhance economic growth and to reduce carbon dioxide emissions. So, it is pivotal to give an emphasis to the untouched energy sources.