Causal relationship between Industrialization, Energy Intensity, Economic Growth and Carbon dioxide emissions: recent evidence from Uganda

Abstract

With Uganda's desire to industrialize for economic transformation and development comes with negative effect on environment as carbon emissions increases. Our study used econometric approach to perform empirical analysis to arrive at our findings on causal correlation between carbon dioxide emissions (CO2), energy intensity, industrialization, and economic expansion in Uganda for the period 1990 to 2014 using autoregressive distributed lag approach. In the long-run, economic growth and industrialization increase of 1% each increase carbon emission by 31.1% and 3.2% respectively while 1% increase in energy intensity decrease emission by 83.9%. Results of ARDL shows that, joint effect of energy intensity, economic progress and industrialization at constant decrease emissions by 2.46% in Uganda. In the pursuit of carbon emissions mitigation in Uganda, there is the need to increase energy intensity to reduce emissions level in the long-run. This requires the need to undertake wide-ranging of policy and institutional reforms.Keywords: Carbon dioxide, ARDL, Variance Decomposition, Impulse Response FunctionJEL Classifications: O44, Q51, Q56DOI: https://doi.org/10.32479/ijeep.7420