The determinants of CO2 emissions: empirical evidence from Italy

This paper investigates major determinants of CO2 emissions in a small open economy such as Italy over the period 1960-2012 using Granger causality and cointegration methods to ascertain short-run and long-run relationships between emissions, trade openness and energy consumption. The research findings do not support a possible decoupling between economic growth and energy consumption, so that energy conservation policies are expected to have a negative impact on economic growth. Therefore, the use of environmentally friendly and renewable energy sources, such as solar, hydro and wind power, should be further encouraged instead of fossil fuels ones.