ENSURING SUSTAINABLE ECONOMIC GROWTH IN THE TRANSITION TO A GREEN ECONOMY: AN ECONOMETRIC ANALYSIS OF THE RELATIONSHIP BETWEEN CARBON EMISSIONS AND ECONOMIC DEVELOPMENT
DOI:
https://doi.org/10.5281/zenodo.17577312Keywords:
green economy transition, carbon emissions, economic development, econometric analysis, sustainable growth, CO₂ emissions, GDP-emissions nexus, ordinary least squares, decoupling strategy, cement emissions, oil consumption, environmental sustainability, policy implications, diagnostic testingAbstract
This study employs econometric analysis to examine the complex relationship between carbon emissions and
economic development during the transition to a green economy. Using time-series data from 1990 to 2022, we estimate
three distinct Ordinary Least Squares (OLS) models to investigate the emissions-growth nexus. The analysis reveals
that Model 3 (GDP predicted by emission sources) demonstrates superior explanatory power (R² = 0.9475, p < 0.001)
compared to basic emissions-GDP relationships. Key findings indicate that cement CO₂ emissions exhibit a statistically
significant positive relationship with economic growth (β = 0.0545, p < 0.001), while oil CO₂ emissions show a significant
negative association (β = -0.0058, p < 0.001). Coal, gas, and flaring emissions demonstrate statistically insignificant effects
on GDP. Diagnostic tests confirm model validity through normality (Shapiro-Wilk p > 0.05), homoscedasticity (Breusch-
Pagan p > 0.05), and acceptable multicollinearity levels (VIF < 5.4), though autocorrelation concerns were identified. The
results suggest that strategic decoupling is feasible, with cement industry modernization and oil consumption reduction
presenting key leverage points for sustainable growth. This research provides empirical evidence for policymakers
to design targeted strategies that balance economic development with environmental sustainability, supporting the
hypothesis that selective emission reduction can coexist with economic progress during the green transition.
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