Carbon emissions: Responses to energy intensity, energy conversion and energy prices. Cointegration analysis for Greece

The purpose of this paper is to identify whether changes of carbon emissions are mutually interrelated with changes of energy intensity, prices, and energy consumption within the bounds of energy sector. Results indicate that selected variables are cointegrated. An error-correction model is applied to examine the causal relationship among these variables for Greece from 1960 to 2000. Furthermore, our findings support that there is a set of bidirectional and unidirectional causal relations among these variables, showing that energy consumption, energy markets and energy industry are tightly connected with carbon dioxide emissions. The analysis of the set of causal relationships for the Greek Economy is helpful for policy design in similar economies, which have to maintain high growth rates, but also have to achieve targets stemming from Kyoto Protocol obligations. A policy framework must support changes regarding energy production, transformation and use, meeting constraints on CO2 emissions.