Examining the impact of driving factors of Carbon dioxide (CO2) emissions using the STIRPAT model: The case of Ethiopia

Abstract: This paper analyzes the impact of population growth, GDP per capita and technological improvement on Ethiopia’s carbon dioxide emission in the period 1971-2011. Using a STIRPAT model and Auto Regressive Distributive Lag (ARDL) l to analyze this impact, the study found that the highly growing population of Ethiopia has the greatest impact on carbon dioxide emission. More specifically, 1% increase in population growth leads to 1.42% increase in CO2 emission in the long run. In contrast to economic theory and literature, GDP per capita found to be statistically insignificant in impacting emission of CO2 in the country. Moreover, the rapid decline in carbon intensity in the country has significantly reduced carbon emission levels. A reduction in carbon intensity by 1% reduces carbon emission by approximately 1.01%. This study also finds that the ongoing renewable energy transformation of the country’s source towards hydropower energy production has contributed positively to the reduction in carbon emission. As the country has only exploited about 0.9% of its hydropower energy, further investment to this energy source not only contributes to fulfilling the energy need, but also ensure sustainability of its development.