Economic Growth and Air Pollution Dynamics: The Case of Canada

Year 2019, Volume: 2 Issue: 1, 0 - 0, 02.01.2019

Achille Dargaud Fofack , Steve Yaw Sarpong Damis Ferouz Kamna

Abstract

The root cause of the most important issues facing humanity today could
be traced back to environmental mismanagement or inequality. Thus, the aim of
this paper is to examine the dynamic relationship between economic growth and
air pollution in Canada using cointegration tests, vector error correction
models and causality tests on annual data from 1960 to 2014. The cointegration tests reveal that there is a
long-run relationship between economic growth, trade and air pollution in
Canada. The results also show that in the long-run, economic growth and trade
respectively have a positive and a negative impact on air pollution. The vector
error correction models reveal that the coefficient associated with the error
correction term is negative and significant. This means that, any shock
disturbing the long-run equilibrium between economic growth, trade and air
pollution will be corrected at a speed of 10 percent per year. As for the
causality analyses, they show that economic growth does not cause air pollution
in Canada.

Keywords

Air Pollution, CO2 Emissions, Economic Growth, Sustainable Growth

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