Determinants of Carbon Intensity in Vietnam: Evidence from an ARDL Model

Abstract

This study aims to examine the factors influencing the environmental performance of Vietnam’s economy by analyzing the relationship among economic activity, energy transition, technological progress, and emissions per unit of output. Annual time-series data for the period 1990-2021 were collected from the World Bank’s World Development Indicators and the annual reports of the Intellectual Property Office of Vietnam. The autoregressive distributed lag model is employed to investigate both the short-run and long-run effects among the research variables. The empirical results indicate the existence of a long-run cointegration relationship among the variables. The estimation results show that economic activity increases emissions per unit of output, reflecting the economy’s relatively strong dependence on high-emission energy sources. In contrast, the expansion of clean energy use significantly reduces environmental pressure in both the short and long run. Meanwhile, the proxy for technological progress does not exhibit a statistically significant effect on the environmental indicator during the study period. In addition, the error correction coefficient is negative and statistically significant, confirming the existence of an adjustment mechanism toward long-run equilibrium after short-run shocks. Based on these empirical findings, the study proposes several policy implications to promote energy transition, improve the quality of economic growth, and support the achievement of sustainable development goals in Vietnam.