Short-and long-term effects of GDP, energy consumption, FDI, and trade openness on CO2 emissions

This research applies a Vector error correction model to investigate the long-run and short-run effects of gross domestic product (GDP), energy consumption, foreign direct investment (FDI), and trade openness on CO2 emissions. The findings indicate that in the long run, GDP growth per capita has a negative influence on CO2 emission. Energy consumption and trade openness negatively affect CO2 emission. The foreign direct investment as the percentage of GDP in a long time has a positive relationship with CO2 emission. Furthermore, the short-run GDP per capita affects CO2 -emission with two-year lags and energy consumption influences CO2 emission with a one-year lag. These observations have many implications for policy-makers in issuing the FDI policy in Vietnam in recent times and considering the impact of economic development on protecting the sustainable growth in the long-run.