Cointegration and causality testing between economic growth and environmental impact in Viet Nam

TRAN HOANG VU

PhD.; University of Finance and Accountancy; Email: [email protected]

Abstract

Economic growth and environmental impact are deeply interlinked, as expansion often entails greater energy use, resource consumption, and emissions. This study investigates the causal relationship between economic growth and CO2 emissions in Viet Nam. We employ cointegration and Granger-causality tests on time-series data, using CO2 emissions as the dependent variable and 4 explanatory factors: access to electricity, GDP growth rate, industrial output, and urbanization rate. Our findings reveal long-run equilibrium linkages between economic activity and emissions, and identify the direction of causality among these variables. Based on these results, we propose policy measures to harmonize economic development with sustainable urban planning and cleaner energy provision in Viet Nam.

Keywords: CO2 emissions, cointegration analysis, economic growth, Granger-causality, sustainable urbanization, Viet Nam

(This article was published in the Vietnam Economic&Financial Review, Vol 1, Issue 2, December 2025)

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