The Relationship among Real Gross Domestic Product, CO2 Emissions, and Energy use in South Caucasus and Turkey

Abstract

The paper analyses the relationship among real GDP, CO2 emissions and energy use in South Caucasus countries and Turkey over the 1992-2013 years. Results of unit root tests show that all variables are integrated of order one. In general, cointegration tests with breaks suggest the presence of a long-run relationship between these variables. Causality results suggest that “conservation hypothesis” holds for Armenia; while, for Azerbaijan and Georgia, we reached mixed results, since both “feedback hypothesis” and “growth hypothesis” received support by empirical findings. Finally, no evidence of causality emerges for Turkey, in favour of “neutrality hypothesis”. Therefore, the relevant policy implication of the study is that a common energy policy strategy would not be pursued by these countries, given the different causality links emerged in the area.Keywords: GDP; CO2 emissions; energy use; South-Caucasus; Turkey; time-series.JEL Classifications: B22; C32; N55; Q43.