The effects of militarization on biofuel consumption and CO2 emission

The cointegration and causal relation among CO2 emissions, economic growth, militarization, and biofuel consumption were tested from 1984 to 2015 period for Unite States (US). The Autoregressive Distributed lag and three supplementary long-run estimators: the Dynamic OLS, Canonical Cointegration Regression and Fully Modified OLS were employed to reveal the long run impacts of economic growth, militarization and biofuel consumption on CO2 emissions. Toda and Yamamoto's MWALD and Rao F tests were applied to find out the direction of causality. The evidence of bi-directional causality between biofuel consumption and economic growth, between economic growth, between militarization and biofuel consumption, and CO2 emissions and between biofuel consumption and CO2 emissions was determined. The results of forecast-error variance determined 50.1% of the forecast-error variance of CO2 emissions is explained by the forecast-error variance of militarization and 59.4% by energy consumption.