Energy consumption, emissions and economic growth in Bahrain

This study examines the Granger causality relationships between economic growth, energy consumption and emissions, from 1980 to 2007 in Bahrain, controlling for capital and urban population using Toda and Yamamoto's approach. It was found that there is unilateral causality which runs from urban population, economic growth, capital and energy consumption to environment. Further, we found strong support for causality running from economic growth to energy consumption, emissions and capital. The existence of these linkages suggests that the government of Bahrain may pursue energy efficiency strategies and carbon emissions reduction policy in the long run without impeding economic growth. Additionally, the long run pursuit of high economic growth given sustained increases in energy efficiency may also reduce CO2 emissions intensity per unit of her GDP.