CO₂ emissions analysis for East European countries: the role of underlying emission trend

This paper aims to analyze the impact of energy consumption, economic structure, and manufacturing output on the CO₂ emissions of East European countries by applying the Structural Time Series Model (STSM). Several explanatory factors are used to construct the model using annual data of the 1990–2017 period. The factors are: total primary energy supply, GDP per capita and manufacturing value added, and, finally, a stochastic Underlying Emission Trend (UET). The significant effects of all variables on CO₂ emissions are detected. Based on the estimated functions, CO₂ emissions of Belarus, Ukraine, Romania, Russia, Serbia, and Hungary will decrease, by 2027, to 53.2 Mt, 103.2 Mt, 36.1 Mt, 1528.2 Mt, 36 Mt, and 36.1 Mt, respectively. Distinct from other countries, CO₂ emissions of Poland will extend to 312.2 Mt in 2027 due to the very high share of fossil-based supply (i.e., coal and oil) in Poland. The results also indicate that the most forceful factor in CO₂ emissions is the total primary energy supply. Furthermore, for Poland, Romania, Hungary, and Belarus, the long-term impact of economic growth on CO₂ emissions is negative, while it is positive for Russia, Ukraine, and Serbia. The highest long-term manufacturing value-added elasticity of CO₂ emissions is calculated for Serbia and Belarus.