Greenhouse Gas Emissions, Economic Factors, and Socio-Economic Dynamics in Canada

Abstract

This study investigates how economic and socio-economic structures are associated with greenhouse gas emissions in Canada between 1990 and 2024. Moving beyond a narrow growth–energy perspective, it brings together economic growth, population density, energy consumption, renewable energy, financial development, income inequality, and trade openness within a unified time-series framework. The analysis employs a VECM to examine long-run equilibrium and short-run adjustment, while FMOLS provides robustness evidence for the long-run estimates. The findings show that emissions are positively associated with growth, population density, energy consumption, income inequality, and trade openness, but negatively associated with renewable energy and financial development. Short-run dynamics largely reinforce these long-run patterns, and the error-correction mechanism indicates gradual adjustment toward equilibrium. The results suggest that Canada’s emissions reflect not only energy intensity and scale, but also demographic, distributional, financial, and external-integration channels. Policy responses should combine energy transition with cleaner production, financial allocation, and socio-economic considerations.