The Driving Forces of Co2 Emissions and Its Responsiveness in Ethiopia: An Integrated Analysis Using Vector Error Correction Model

The main objective of this study is to examine the driving factors of CO2 emissions in Ethiopia to promote sustainable development. This study, employees an integrated approach of the multiplicative product of Population, Affluence, and Technology (IPAT) identity as a framework using Vector Error Correction Model (VECM). The results indicate the long-run responsiveness of CO2 emissions for the population is positive and significant and fits with the Malthusian perspective, which holds that population growth increases environmental impacts and showing the combined move of social and environmental sustainability is not bearable. To measure the effect, a one percentage change increase in population leads to a 1.9 percentage increment in the CO2 emission in Ethiopia, significantly and adversely affecting the human and environment system in the long run. Therefore, the government seeks to devise a sound policy to manage population pressure and reduce its adverse effect on human and environment system to promote the green growth strategy and sustainable development.