Investigation of Non-Linear Impacts of Factors Affecting Greenhouse Gas Emissions

The link between economic growth and environmental pollution has been extensively and statistically analyzed over the past two decades. The present study investigates the non-linear effects of variables affecting greenhouse gas emissions. To this aim, a Time Varying Parameters Vector Autoregression (TVP-VAR) model has developed using annual data which covers the period 1972-2018. Moreover, the associated Impulse Response Function (IRF) of the selected influential variables such as GDP (oil, without oil) and electricity consumption on the greenhouse gas emissions (carbon dioxide) has computed. Findings revealed the nonlinear impact of GDP on the greenhouse gas emission, so that until 2002 it had a positive effect on reducing greenhouse gas emission; whereas, from 2002 onwards it had a negative impact and led to escalating the greenhouse gas expansion. Besides, the positive shock of electricity consumption and GDP (without oil) on greenhouse gas emissions during the entire period was positive. Furthermore, the emission of greenhouse gas on itself is positive throughout the study period.