The Effect of Renewable, Non- Renewable and Biomass Energy Consumption and Economic Growth on Co2 emission in Ethiopia

Table of Contents

1. Introduction

1.1 Background of the study

1.2 Statement of the problem

1.3 Data source and type

1.4 Significance of the study

1.5 Objective of the study

1.6 Organization of the paper

2. Review of Theoretical and Empirical Literature

2.1 Review of Theoretical Literature

2.1.1 Introduction

2.1.2 Energy, Growth and Environment

2.1.3 Renewable energy, Economic Growth and the environment

2.2 Empirical review

2.2.1 International studies

2.2.2 Studies on Ethiopia

3. Overview of Energy and Emission in Ethiopia

3.1 Ethiopia’s Energy sector overview

3.2 Overview of Ethiopia’s Emission Profile

3.3 Institutional and Policy Commitments and Developments

4. Data, Model and Methodology

4.1 Data, variables and model

4.2 Econometric methodology

4.2.1 Stationary or unit root test

4.2.2 Co integration and Error correction Model

4.2.3 Short run and long run models

4.2.4 Diagnostic and stability tests

5. Empirical Results and Discussion

5.1 Descriptive Analysis

5.2 Unit Root Test Results

5.3 Test Result for Co integration- bound test approach

5.4 Diagnostic and stability test results

5.5 Long Run Model Estimation result

5.6 Short Run Error Correction Model Estimation Results

6. Conclusion and Implication

6.1 Conclusion

6.2 Implications

6.3 Future research direction

Research Objectives and Themes

The primary objective of this study is to analyze the relationship between different sources of energy consumption (biomass, non-renewable, and modern renewable), economic growth, and CO2 emissions in Ethiopia using an Autoregressive Distributive Lag (ARDL) framework. The study aims to clarify the environmental impacts of specific energy segments in the context of Ethiopia’s rapid economic growth and its strategic shift toward a green economy.

• The role of biomass energy in carbon emissions within an unsustainable consumption context.
• The comparative environmental impact of non-renewable versus modern renewable energy sources.
• The link between Ethiopia's economic growth (real GDP per capita) and increasing CO2 emissions.
• Evaluation of policy implications for sustainable energy development in Ethiopia.
• Empirical analysis of long-run and short-run dynamics using the ARDL methodological framework.

Excerpt from the Book

Summary of Chapters

Introduction: Provides the background and context of the energy-growth-environment nexus, establishing the research problem and objectives within the Ethiopian context.

Review of Theoretical and Empirical Literature: Examines existing theories such as the Environmental Kuznets Curve (EKC) and reviews global and national empirical studies regarding energy and environmental quality.

Overview of Energy and Emission in Ethiopia: Describes the current energy landscape, emission profiles by sector, and institutional commitments toward a green economy in Ethiopia.

Data, Model and Methodology: Outlines the data sources, specifies the variables, and details the Autoregressive Distributive Lag (ARDL) econometric approach used for the study.

Empirical Results and Discussion: Presents the descriptive statistics, unit root tests, co-integration analysis, and the long-run/short-run estimation results.

Conclusion and Implication: Summarizes the key findings and provides policy recommendations for harmonizing Ethiopia's growth with environmental protection goals.

Keywords

CO2 emission, Biomass energy, Renewable energy, Non-renewable energy, Economic growth, Ethiopia, ARDL, Climate change, Sustainability, Environmental degradation, Energy consumption, Green economy, Econometric methodology, Greenhouse gas, Real GDP.

Frequently Asked Questions

What is the core focus of this research paper?

The paper examines the causal and long-run relationships between the consumption of three distinct energy sources (biomass, non-renewable, and modern renewable), economic growth, and CO2 emissions specifically within Ethiopia.

What are the primary themes addressed in the study?

The research explores the environmental impact of energy choices, the role of economic development in pollution, the urgency of shifting to sustainable energy, and the validation of econometric relationships using time-series data.

What is the main objective of the thesis?

The objective is to determine how different energy segments affect CO2 emissions in Ethiopia, thereby providing a data-driven basis for energy and environmental policy, particularly in alignment with the national Climate Resilient Green Economy (CRGE) strategy.

Which scientific methodology does the author use?

The author employs the Autoregressive Distributive Lag (ARDL) methodological framework, supplemented by unit root tests (ADF), bound tests for co-integration, and stability diagnostics like CUSUM.

What is covered in the main body of the work?

The main body covers the theoretical background, an overview of Ethiopia’s specific energy and emission profile, the formulation of the econometric model, and a detailed discussion of long-run and short-run empirical estimations.

Which specific energy categories are analyzed?

The study disaggregates energy into biomass energy (traditional/often unsustainable), modern renewable energy (hydro, wind, solar), and non-renewable energy (imported fossil fuels).

How does biomass energy specifically impact Ethiopia's environment according to the study?

The findings indicate that biomass energy consumption has a significant, positive, and devastating long-run impact on CO2 emissions, largely due to unsustainable harvesting and forest degradation.

What does the study conclude about economic growth in Ethiopia?

It concludes that economic growth, as represented by real GDP per capita, is positively and significantly correlated with increased CO2 emissions, suggesting that the current stage of economic development is carbon-intensive.

Is modern renewable energy an effective mitigation strategy?

Yes, the study finds that modern renewable energy consumption negatively and significantly affects CO2 emissions in the short run, supporting the government's aggressive investment in sectors like hydroelectric power.