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The relationship between renewable energy consumption, CO2 emissions and economic growth in Denmark

Kulionis, Viktoras LU (2013) EKHR71 20131
Department of Economic History
Abstract
This study utilizes a multivariate framework to test the causal relationship between renew- able energy consumption, gross domestic product (GDP) and carbon dioxide (CO2) emissions in Denmark using annual data from 1972-2012. The causal relationship between variables is examined using Granger causality test in VAR framework. Results of unit root tests show that all variables are non-stationary in their level form and stationary in first difference form. Cointegration analysis following Johansen (1992) approach, shows that there is no evidence of cointegration among the test variables. The empirical results from Granger causality Toda- Yomamoto test and Granger causality test using first differences strongly supports a unidi- rectional... (More)
This study utilizes a multivariate framework to test the causal relationship between renew- able energy consumption, gross domestic product (GDP) and carbon dioxide (CO2) emissions in Denmark using annual data from 1972-2012. The causal relationship between variables is examined using Granger causality test in VAR framework. Results of unit root tests show that all variables are non-stationary in their level form and stationary in first difference form. Cointegration analysis following Johansen (1992) approach, shows that there is no evidence of cointegration among the test variables. The empirical results from Granger causality Toda- Yomamoto test and Granger causality test using first differences strongly supports a unidi- rectional causality coming from renewable energy consumption to CO2 emissions. The results of this study also indicate that there is no statistically significant causality between the eco- nomic growth and renewable energy consumption, which supports the neutrality hypothesis and implies that energy conservation policies should not have a significant impact on economic growth. The empirical results also reveal that there is no causality between economic growth and CO2 emissions. This may be due to the fact that Denmark has one of the lowest energy intensities in the world, which allows to achieve one unit of GDP with a minimum input of energy and minimum CO2 emissions. (Less)
Please use this url to cite or link to this publication:
author
Kulionis, Viktoras LU
supervisor
organization
course
EKHR71 20131
year
type
H1 - Master's Degree (One Year)
subject
keywords
Renewable energy, CO2 emissions, economic growth, Granger causality, Denmark
language
English
id
3814694
date added to LUP
2013-06-28 15:28:37
date last changed
2013-06-28 15:28:37
@misc{3814694,
  abstract     = {This study utilizes a multivariate framework to test the causal relationship between renew- able energy consumption, gross domestic product (GDP) and carbon dioxide (CO2) emissions in Denmark using annual data from 1972-2012. The causal relationship between variables is examined using Granger causality test in VAR framework. Results of unit root tests show that all variables are non-stationary in their level form and stationary in first difference form. Cointegration analysis following Johansen (1992) approach, shows that there is no evidence of cointegration among the test variables. The empirical results from Granger causality Toda- Yomamoto test and Granger causality test using first differences strongly supports a unidi- rectional causality coming from renewable energy consumption to CO2 emissions. The results of this study also indicate that there is no statistically significant causality between the eco- nomic growth and renewable energy consumption, which supports the neutrality hypothesis and implies that energy conservation policies should not have a significant impact on economic growth. The empirical results also reveal that there is no causality between economic growth and CO2 emissions. This may be due to the fact that Denmark has one of the lowest energy intensities in the world, which allows to achieve one unit of GDP with a minimum input of energy and minimum CO2 emissions.},
  author       = {Kulionis, Viktoras},
  keyword      = {Renewable energy,CO2 emissions,economic growth,Granger causality,Denmark},
  language     = {eng},
  note         = {Student Paper},
  title        = {The relationship between renewable energy consumption, CO2 emissions and economic growth in Denmark},
  year         = {2013},
}