Fossil fuel energy consumption, economic growth, urbanization, and carbon dioxide emissions in Kenya

Abstract We investigate the relationship between fossil fuel energy consumption, economic growth, urbanization, and carbon dioxide emissions in Kenya from 1971 to 2014. The study employs lin-log and log-lin models and uses the autoregressive distributed lag bounds cointegration test, the Johansen-Juselius cointegration test, and the Gregory-Hansen structural breaks test for cointegration to determine the presence of a long-run causal relationship between variables. Except for urbanization, the empirical results of fossil fuel consumption and economic growth show a positive relationship with carbon dioxide emissions. Besides, the study investigates the relationship between the variables by employing a Granger-based causality test based on a vector error correction model. Short-run Granger causality results show unidirectional causality running from fossil fuel energy consumption to economic growth, urbanization to carbon dioxide emissions, and economic growth to carbon dioxide emissions. These findings can assist policymakers in Kenya and other developing countries in developing conservation and efficiency policies for sustainable urbanization and production that reduce carbon dioxide emissions.JEL Classification: K32, P18, Q35, Q43, Q44