Rafał Kasperowicz

Poznan University of Economics Poland

rafal.kasperowicz@ue.poznan.pl

Economic growth and CO2 emissions: the ECM analysis

ABSTRACT. Our paper uses the panel data approach to investigate the relationship between CO2 emissions and economic growth for 18 EU Member Countries from 1995 to 2012. The economic growth of countries impels an intensive use of energy which results in growing CO2 emissions, so the pollution is directly linked with economic growth and development. Using basic ECM estimation we verified that the long-run relationship between GDP and CO2 emissions is negative, because the development of new low-carbon technologies enables in the long-run reaching the same production level at lower CO2 emissions and that the short-run relationship between GDP and CO2 emissions is positive, because the fast increase in production can be reached due to more intensive energy use by the existing technologies, then the capacity increases as well CO2 emissions.

Received: July, 2015

1st Revision: September, 2015

Accepted: November, 2015

DOI: 10.14254/2071-8330.2015/8-3/7

JEL Classification: C23, Q43, O40

Keywords: : energy consumption, economic growth, panel data analysis, ECM, CO2 emissions