Carbon dioxide emissions, GDP, energy use, and population growth in Ghana

What is it about?

In this study, the relationship between carbon dioxide emissions, GDP, energy-use and population growth in Ghana was investigated spanning from 1971-2013 by comparing a Vector Error Correction Model (VECM) and Autoregressive and Distributed Lag (ARDL). Prior to testing for Granger causality based on VECM, we tested for unit roots and Johansen’s multivariate co-integration. We also performed a Variance Decomposition Analysis using Cholesky technique and comparing it with other studies. Evidence from the variance decomposition shows that 21% of future shocks in carbon dioxide emissions are due to fluctuations in energy-use, 8% of future shocks are due to fluctuations in GDP and 6% of future shocks are due to fluctuations in population. There was evidence of bidirectional causality running from energy-use to GDP and a unidirectional causality running from carbon dioxide emissions to energy-use, carbon dioxide emissions to GDP, carbon dioxide emissions to population, and population to energy-use. Evidence from the long-run elasticities shows that a 1% increase in population in Ghana will increase carbon dioxide emissions by 1.72%. There was evidence of short-run equilibrium relationship running from energy-use to carbon dioxide emissions and GDP to carbon dioxide emissions. As a policy implication, the addition of renewable energy and clean energy technologies into Ghana’s energy mix can help mitigate climate change and its impact in the future.

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Why is it important?

The extent of GDP, energy use, and population growth on carbon dioxide emissions in Ghana is revealed