A multivariate causality analysis of CO2 emission, electricity consumption, and economic growth: Evidence from Western and Central Africa

The vector error correction model is used to examine the short-and long-run impacts of electricity consumption and economic growth on CO2 emissions in Western and Central Africa from 1970 to 2020. This paper adopted time series vector error correction model (VECM) approach to conduct stationarity test, cointegration test, stability test, and Granger causality test. Cointegration tests are used to examine the long-run impact of electricity consumption and economic growth on CO2 emissions. It was revealed that CO2 emission, electricity consumption and economic growth are co-integrated. Electricity consumption and economic growth have a significant and positive effect on CO2 emission. The study also revealed that the adjustment process is not driven by electricity consumption, and anytime there is a deviation from the long-run equilibrium, economic growth and CO2 emission adjust to restore the long-run equilibrium. From the short-run Granger cau-sality, electricity consumption and economic growth do not Granger cause CO2 emissions. However, past values of CO2 emissions have an effect on the present value of economic growth. Generally, long-run dynamics of electricity consumption and economic growth were established to have a greater impact on CO2 emission than the short-run dynamics. Hence, it is important to promote green economic concepts in the area.

Automated summary

The study applies the vector error correction model to analyze the short- and long-run impacts of electricity consumption and economic growth on CO2 emissions in Western and Central Africa from 1970 to 2020. The results show that there is cointegration among CO2 emission, electricity consumption, and economic growth, with electricity consumption and economic growth having a significant positive effect on CO2 emission. Furthermore, the adjustment process is not driven by electricity consumption, and any deviation from the long-run equilibrium leads to adjustments in economic growth and CO2 emission. The long-run dynamics of electricity consumption and economic growth have a greater impact on CO2 emission than the short-run dynamics, highlighting the importance of promoting green economic concepts in the region.