Cointegration Analysis of CO2 Emissions, GDP, and Environmental Protection Costs: A Case Study of Azerbaijan

The discourse surrounding global climate change and the necessity for embracing environmentally sustainable practices has gained significant traction within contemporary scientific circles. Recent years have witnessed a notable surge in the examination of green economic analyses, undertaken both globally and locally, signifying their heightened importance. This shift in emphasis holds particular relevance within Azerbaijan’s scientific domain, given the country’s active involvement in international initiatives aimed at propelling green and sustainable development agendas forward. This study undertakes an investigation into the intricate relationship between economic progress, expenditures on environmental protection, and carbon emissions in Azerbaijan through the utilization of cointegration analysis. Employing empirical methodologies such as the Johansen cointegration model, the research delves into the interplay among carbon dioxide (CO2) emissions, Gross Domestic Product (GDP), and Environmental Protection Costs (EPC). The findings unveil a sustained equilibrium association among these variables, underscoring the imperative for increased investment in environmental protection to curb CO2 emissions in tandem with economic advancement.