ASSESSMENT OF THE IMPACT OF CONSUMER PRICE INDEX AND RENEWABLE ENERGY CONSUMPTION ON CO2 EMISSIONS IN AZERBAIJAN

This study investigates the correlation between carbon dioxide (CO2) emissions, renewable energy consumption (REC), and the consumer price index (CPI) in Azerbaijan between 1995 and 2019. The research employs measurements of CO2 emissions in kilotons, renewable energy consumption as a proportion of total energy consumption, and the consumer price index using real values as of 2010. Various analytical techniques such as Johansen, DOLS, FMOLS, and CCR were applied to analyze the time series data. Additionally, the Granger causality test was employed to establish the causal relationship between the variables. The findings of the empirical analysis indicate that a 1% increase in CPI is associated with an average CO2 increase of 0.14%, whereas a 1% increase in REC is linked to an average CO2 decrease of 0.06%. The research suggests that improving state policies to promote alternative energy sources for energy consumption in Azerbaijan is necessary.