Browsing by Subject "Carbon dioxide emissions"

This thesis is aimed to investigate the long-run and short-run relationship between renewable, nuclear energy consumption, economic growth and CO2 emissions in Finland. The historic development and current situations of the energy consumption, economic growth and CO2 emissions are discussed. Then Johansen cointegration test and Vector Error Correction Model (VECM) are applied in the empirical analysis to further exploit the causal relationships between the variables. There are four variable employed in this thesis: renewable energy consumption (REC), nuclear energy consumption (NUC), Gross Domestic Product (GDP) and CO2 emissions (COE). The data of the variables span from 1977 to 2020 and mainly come from official databases and reports from the Finnish government and international organizations, such as Statistics Finland, Our World in Data, World Bank, etc. The results indicate that there is the positive bidirectional long-run relationships between NUC, REC and GDP. Also, the unidirectional long-run relationships of GDP, REC, NUC with COE are estimated. The increase in GDP and NUC are estimated to increase COE in the long run, while REC is estimated to decrease COE. Furthermore, the negative short-run relationships between REC, NUC and COE are found, which shows that, in the short run, renewable and nuclear energy consumption in Finland is estimated to reduce the CO2 emissions. The findings from the thesis indicate renewable energy consumption is both economic and environmental-friendly. Nuclear energy is also good for economic growth in the long run and environment in the short run, but needs to be cautiously treated with regard to environmental protection in the long-run strategies. Also, there has been the trend of impact decoupling in Finland in the short term. However, further research is needed to test the EKC hypothesis and its turning point.