Influence of Real GDP Growth Rate, Industrialization, Energy Consumption on Carbon Dioxide Emissions: An Evidence from Vietnam

Abstract

The purpose of this paper is to investigate the effects of energy consumption, economic growth and industrialization on carbon dioxide emissions in Vietnam. Using an autoregressive distributed lag model (ARDL model) on the data during the period over 1985-2013, collected from World Development Indicators, Department of Statistics in Vietnam. Evidence from the study shows that carbon dioxide emissions, GDP growth, energy consumption and industrialization are co-integrated and have a long-run equilibrium relationship. Our results demonstrate that both industrialization and energy consumption have positively affected carbon dioxide emissions and significant while economic growth also has positively affected carbon dioxide emissions but insignificant. In addition to short run relationship, evidence from the long-run result has policy implications for Vietnam; a 1 percent increase in industry growth will increase carbon dioxide emissions by 276 kt, while a 1 kg of oil increase in energy consumption will increase carbon dioxide emissions by 168 kt in the long-run. Increasing industry growth in Vietnam will therefore increase environmental pollution in the long-run. Positive effect of energy consumption on carbon dioxide emissions raise a problem of using non-green energy in Vietnam. It is noteworthy that the Vietnamese Government promotes sustainable economics, which improves the use of clean and environmentally energy.