Carbon dioxide, renewable energy and economic growth : A Swedish non-EKC case study

Abstract: The purpose of this master’s thesis is to investigate the relationship between renewable and non-renewable energy consumption, economic growth and carbon dioxide emissions per capita in Sweden in the period of 1970-2018. As indicators, the economic indicator will be represented by the per capita gross domestic product, GDP, as the environmental indicator this study will use carbon dioxide emissions per capita, CO2, and the energy use per capita will represent the energy consumption variable.  The research hypothesis is based on the idea of the classical EKC, the Environmental Kuznets Curve. Multivariate Vector Error Correction Model (VECM) approach which makes possible to evaluate non-stationary and cointegrating variables, while overcoming the omitted variable bias was used for the methodology part. Econometrics tests such as Augmented Dickey-Fuller Test and Johansen co-integration test are included, and the Granger causality test will provide four hypothesizes for the potential causalities between the included variable in this study.