Energy and economic factors affecting carbon dioxide emissions in Sudan: An empirical econometric analysis (1969-2015)

Abstract. The objective of this study is to investigate some energy and economic growth factors in explaining the behaviour of CO2 emissions in Sudan over the period 1969-2015 using annual time series data. The OLS estimated model shows that there is significant effect of total energy use per capita, oil consumption, GDP per capita GDPP, trade openness and foreign direct investment on CO2 emissions in Sudan. The estimated model indicates a positively signed and statistically significant coefficient of relationship between the squared GDP per capita and CO2 emissions in Sudan, thus contradicting the EKC hypothesis claim. The Johansen cointegration test results show existence of a long run equilibrium relationship between CO2 emissions, energy use and economic growth factors. Consistent with the OLS estimates, the ARDL model results show nonexistence of an EKC as well as showing that energy use per capita and oil consumption as the main deriving factors behind CO2 emissions in Sudan in both the short run and long run. The ARDL model also indicates that CO2 emissions adjust to a steady state equilibrium position by a factor of 66%. Granger causality test shows existence of bidirectional relationship running from GDPP value and the squared GDPP to CO2 emissions with no sign of feedback effects. Oil and FDI are found to be Granger causing CO2 emissions, indicating pollution haven. The study recommends that energy efficiency measures in terms of proper pricing of oil derivatives, expansion of production and use of liquefied petroleum gas (LPG) and restrictions in production and use of fuel woods and charcoal with sustainability pricing of these forest products should be adopted within the country intended nationally determined contribution. These measures are needed because it is unlikely for a low income country like Sudan to reduce energy use per capita which is already low and energy use per unit of output needed for foresting economic growth. Impacts of FDI need to be assessed and environmentally regulated.Keywords. Energy use, GDP Per Capita, trade openness, CO2 emissions, Cointegration, ARDL, Granger Causality, Sudan.JEL. C13 C32 Q43 Q56