An econometric evaluation of the effects of economic growth, energy use, and agricultural value added on carbon dioxide emissions in Vietnam

Abstract

Global climate change caused by Greenhouse Gases (GHGs), particularly carbon dioxide (CO2) emissions, poses incomparable threats to the environment, development and sustainability. Vietnam is experiencing continuous economic growth and agricultural advancement, which causes higher energy consumption and CO2 emissions. Understanding Vietnam’s sensitivity to climate change is becoming more crucial for governments trying to reconcile climate change mitigation and sustainable development. Analyzing pollution-development trade-offs can help minimize environmental degradation in Vietnam. Therefore, the present study empirically investigated the nexus between economic growth, energy use, agricultural added value and CO2 emissions in Vietnam. To investigate the short-run and long-run relationships between the variables, this study employed the autoregressive distributed lag (ARDL) technique and the Vector Error Correction Model (VECM) using the time series data from 1984 to 2020 for Vietnam. The empirical findings indicated that economic growth and energy use trigger environmental degradation by increasing CO2 emissions, whereas enhancing agricultural added value improves Vietnam’s environmental quality by reducing CO2 emissions in both the long-run and short-run. The estimated results are robust compared with alternative estimators such as dynamic ordinary least squares (DOLS), fully modified least squares (FMOLS), and canonical cointegrating regression (CCR). This research contributes to the existing literature by shedding light on the potential of agricultural added value to reduce emissions in Vietnam and provides policy recommendations in areas of low-carbon economy, promoting renewable energy, and sustainable agriculture that can reduce CO2 emissions in Vietnam.