Environmental Degradation by Energy–Economic Growth Interlinkages in EU Agriculture

Abstract

Energy has the most significant input to agricultural production. The EU’s effort to produce a carbon-neutral economic entity necessitates changes in the energy mix used for agricultural production. Therefore, we employ different variables, in particular, the emissions generated by energy sources, namely coal, natural gas, and diesel gas and their interlinkages with the GDP share generated from agriculture. The data are annual and refer to the period 1970–2020. The ARDL methodology is the econometric tool employed. The year 1990 is identified as a statistically significant break point for all variables, while for the cointegrating equation, the year 2009 appears to play a significant role. Emissions generated by coal appear to play a vital role in the GDP share generated by agriculture and, therefore, should be the main focus of the policy measures taken. Coal should be replaced by other renewable sources or the use of technologies by farmers that improve energy efficiency in order to make the agricultural income stable and to achieve the objective of carbon-neutral agriculture in the EU.

Keywords

• agricultural income
• energy
• EU
• ARDL