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This study examines the linkages among economic growth, energy consumption, financial development, trade openness and CO₂ emissions over the period of 1975Q₁–2011Q₄ in case of Indonesia. The stationary analysis is performed by using Zivot–Andrews unit root test and the ARDL bounds testing approach for a long run relationship between the series in the presence of structural breaks. The causality between the concerned variables is examined by the VECM Granger causality technique and robustness of causal analysis is tested by innovative accounting approach (IAA).

Our results confirm that the variables are cointegrated; it means that the long run relationship exists in the presence of structural breaks. The empirical findings indicate that economic growth and energy consumption increase CO₂ emissions, while financial development and trade openness compact it. The VECM causality analysis has …