Energy, Urbanization, and Sustainability Indicators: Empirical Data from Kazakhstan

Abstract

The sustainable strategies are required by integrating energy, urbanization and environmental factors for sustainable development-maximizing human well-being in the current time without depriving future generations to meet their needs. This paper intends to identify the short-run and long-run causal relationship between Kazakhstan’s sustainability indicators (CO2 emissions and solid waste), urbanization, economic development, and energy. Time-series data for the years 1990 to 2021 have been used in the paper; the data have been derived from the World Bank database. The methodology of this paper applies the Vector Error Correction Model based on the various econometric techniques such as Panel Unit Root Test, Granger Causality Test, Johansen Cointegration Test. The results of the Granger Causality Test confirms that a causal relationship has CO2 emissions from GDP, waste from population as share of urban population and a weak dependence on energy consumption, but on the contrary CO2 emissions affect energy consumption and a similar interrelation of urbanization with CO2 emissions. The empirical finding of Johansen Cointegration Test indicates that there is evidence that, in the long term, both urbanization and energy consumption contribute to CO2 emissions in Kazakhstan and in addition, the results demonstrate that urbanization contribute to energy consumption (it statistically significant as its absolute t-value is 3.89 >2). Results of Vector Error Correction Model confirm that explanatory variables are statistically significant in the long run. Therefore, policies are required to reduce the effects of urbanization by boosting public instruments to preserve environmental quality and use more energy in sustainable manner. In addition, regulations for energy conservation are required across all industries, but particularly in the transportation and energy sector. These policies must also promote and maximize the use of alternative energy sources.