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Energy Consumption, CO2 Emissions and Economic Growth: Sweden's case
Södertörns högskola, Institutionen för samhällsvetenskaper, Nationalekonomi.
2018 (Engelska)Självständigt arbete på avancerad nivå (magisterexamen), 20 poäng / 30 hpStudentuppsats (Examensarbete)
Abstract [en]

The main purpose of this study is to examine the causal relations between energy use, CO2 emissions and economic growth for Sweden. Vector Error Correction model with annual data from 1970 to 2016 has been used in order to determine potential causality between the variables. The empirical findings indicate that in the long-run, causality relationship between energy consumption, CO2 emissions and economic growth cannot be rejected and it is bidirectional. This means that energy is a determining factor for economic growth in Sweden and that applying policies in order to reduce the CO2 emissions has slowed down economic growth in Sweden. This finding is consistent with the Feedback Hypothesis. But in the short-run no causality was found between energy and economic growth. According to Granger causality test results, bidirectional causality between CO2 emissions and energy consumption cannot be rejected in the short-run. Variables’ trends show that in the period under study, energy consumption and economic growth have moved in the same direction; meaning that higher energy consumption has led to higher economic growth. At the same time, lower CO2 emissions have been accompanied by higher economic growth. There is also short-run causality running from capital to economic growth according to VECM results. It can be suggested to the policy makers that in order to maintain economic growth and reduce environmental degradation, energy consumption should be shifted gradually from nonrenewable sources to renewable ones so to avoid decrease in economic growth and ensure lower levels of CO2 emissions in the long-run.

Ort, förlag, år, upplaga, sidor
2018. , s. 39
Nyckelord [en]
economic growth, energy consumption, CO2 emissions, Vector Error Correction model
Nationell ämneskategori
Nationalekonomi
Identifikatorer
URN: urn:nbn:se:sh:diva-35502OAI: oai:DiVA.org:sh-35502DiVA, id: diva2:1214695
Ämne / kurs
Nationalekonomi
Uppsök
samhälle/juridik
Handledare
Tillgänglig från: 2018-06-07 Skapad: 2018-06-07 Senast uppdaterad: 2018-06-07Bibliografiskt granskad

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