A carbon-intensity based ARDL analysis incorporating institutional emissions trading mechanisms in Kazakhstan

The Republic of Kazakhstan sets the goal of achieving carbon neutrality by 2060 and the transition to a green economy. The aim of this work is to study the impact of energy intensity, the use of renewable energy sources and the launch of an emissions trading system (ETS) on carbon intensity in the Republic of Kazakhstan for the period 1992– 2022. To achieve this goal, the method of autoregressive distribution lags was used. The research makes scientific contribution by considering carbon intensity as a target variable in econometric analyses. The practical importance lies in integrating in the model the ETS dummy variable as a determinant of the explained variable. The results of the study showed that there is a long-term relationship between the selected variables, and energy intensity is the main driver of carbon intensity in the long term. The impact of RES has not been statistically confirmed. Verification of the results by including GDP per capita variable, as controlling variable confirmed the correctness of the conclusions of the base model. The results of the work emphasize the importance of enhancing the design of the emissions trading system and improving energy intensity to increase its effectiveness in reducing the carbon intensity of the country’s economy.

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