A cointegration analysis of real GDP and CO2 emissions in transitional countries

Mitić, Petar and Munitlak Ivanović, Olja and Zdravković, Aleksandar (2017) A cointegration analysis of real GDP and CO2 emissions in transitional countries. Sustainability, 9 (4). ISSN 2071-1050

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Abstract

This paper analyses the relationship between real GDP and CO2 emissions for 17 transitional economies based on a series of annual data from 1997 to 2014. The analysis was conducted using Dynamic Ordinary Least Squares (OLS) (DOLS) and Fully Modified OLS (FMOLS) approaches. The results clearly suggest the existence of a statistically significant long-run cointegrating relationship between CO2 emissions and real GDP. A 1% change in GDP leads to around a 0.35% change of CO2 emission on average for the considered group of countries. Close values of long-run coefficients for all estimations confirm the robustness of the estimated results. The authors state that transitional economies need to follow global policy incentives, and try to implement new mechanisms and instruments for the purpose of reducing CO2 emissions, such as environmental taxes, emissions-trading schemes, and carbon capture and storage, if they want to achieve future CO2 emission reductions, while attaining economic growth.

Item Type: Article
Additional Information: COBISS.ID=512435554
Uncontrolled Keywords: real GDP, CO2 emissions, DOLS, FMOLS, environmental degradation, economic growth, transitional countries
Subjects: H Social Sciences > H Social Sciences (General)
Depositing User: Jelena Banovic
Date Deposited: 17 May 2017 12:38
Last Modified: 17 May 2017 12:38
URI: http://ebooks.ien.bg.ac.rs/id/eprint/1085

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