Modelling the nonlinear relationship between co2 emissions and energy consumption : new evidence on the role of economic growth

The objective of this study is to examine the relationship between CO2 emissions and energy consumption while simultaneously accounting for the role of economic growth. Although a few recent studies have paid attention to the nonlinear relationship between the first two variables, no study that we are aware of, has considered these three variables simultaneously. Using data covering 21 countries for the period 1986-2010, the study found the existence of one threshold level of economic growth, which stood at 5.5 percent. It was also found that above this threshold level, CO2 emissions impact more on energy consumption and vice-versa. Policy implication is drawn from these results.