The impact of economic growth and energy consumption on CO2 emissions in Algeria

Abstract

Whether there is a relationship between economic growth and energy consumption and the direction of this relationship is of great importance in energy policy decision making in countries where the state plays an active role in energy markets. If there is a relationship from energy to growth, conservative policies such as energy taxes, energy-saving, and energy prices will hurt growth. This paper attempts to investigate the impact of economic growth and energy consumption on CO2 emissions in Algeria for the period 1990-2100, because energy-related CO2 constitutes over 80% of total emissions, the state energy-related CO2 emission levels provide a good indicator of the relative contribution of individual states to total greenhouse gas emissions. Our empirical results show that the effect of the independent variables on carbon emissions is heterogeneous across quantities. Energy consumption increases the carbon dioxide emissions, with the strongest effects occurring at different quantities for sample group’s data. But the effects of energy consumption on carbon emissions for developed countries are greater than developing countries. In view of the economic development, developing countries and developed countries present the obvious stage characteristics. The empirical findings are in support of inverted U-shaped curve.