International Journal of Scientific and Research Publications, Volume 10, Issue 8, August 2020 947 ISSN 2250-3153 This publication is licensed under Creative Commons Attribution CC BY. http://dx.doi.org/10.29322/IJSRP.10.08.2020.p104118 www.ijsrp.org Urbanization, economic growth and industrial structure on carbon dioxide emissions: empirical evidence from Ethiopia Melaku Adinew Ayitehgiza Department of Economics, Dire Dawa University, Dire Dawa, Ethiopia DOI: 10.29322/IJSRP.10.08.2020.p104118 http://dx.doi.org/10.29322/IJSRP.10.08.2020.p104118 Abstract- Carbon dioxide (CO2) emissions are a leading cause of environmental pollution and have been the most significant problems for the worldwide community. This study examines the dynamic causal relationships between CO2 emissions, industrial structure, economic growth and urbanization for the period 1980–2017 using the Autoregressive Distributed Lag (ARDL) bounds testing approach and Granger causality tests. Augmented Dickey-Fuller and the Phillips-Perron tests used to examine of unit roots of the variables. The results showed that industrial structure, economic growth and urbanization increases CO2 emissions. The result of Granger causality test indicated that there is a bidirectional causal relationship between industrial structure, economic growth, and urbanization and CO2 emissions. The results recommend that industrial structure, economic growth and urbanization were the main determinants of environmental pollution in Ethiopia and a series of policy actions related to industrial structure, economic growth and urbanization should be taken to reduction the environmental degradation. Index Terms- Carbon emissions, economic growth, industrial structure, urbanization, ARDL, Ethiopia I. INTRODUCTION uman-related carbon dioxide emissions appear to be the major source of environmental pollution in the world (IPCC , 2007). An increase of the concentration of the carbon dioxide emission in the atmosphere is one of the most significant problems for the worldwide community. Fossil fuels are main sources of these CO 2 emissions uses of in all sectors. Thus, the world community has been able to regulator carbon emissions and deal with the low carbon economy. Some countries, such as Ethiopia has started a national policy design of the climate resilient green economy (CRGE) strategy in 2011 to deal with current as well as future impacts of climate change (FDRE , 2015) CO2 emissions have been increased significantly from newly industrialized countries when compared with industrialized countries (Jonathan Woetzel et al., 2019; Munir & Zhen, 2018). Global warming has reached alarming levels, raising concerns about global warming and climate change (IPCC, 2013). As a result, CO2 emission and its relationship with economic growth has become important issue in recent years. The effects of economic growth on CO2 emission have become a common area of research in different disciplines. The dynamic expansion of urbanization is a phenomenon that tends to increase social and economic ability from the rural areas to urban areas (UN , 2019). The physical expansions of urban areas lead to economic changes in many developing countries. An increase in the number of people living in cities can boost economic growth and increase trade with the rest of the world, which in turn can increase carbon emissions in the economy. An overview of urbanization reveals flow from rural areas to urban areas associated with factors of economic activities, such as lifestyle, culture and behavior, changing industrial structure, new housing and public facilities and city size distribution(UN, 2019). Urbanization creates upward pressure on CO2 emissions (Anwar & Younis, 2020; Frank, 2016; Niu and Lekse, 2017; Zhang et al., 2015). Urban development provides a great opportunity for industrial development by increasing demand in cities and changing consumer attitudes in African countries(ECA, 2017). Urban expansion and industrial development increase carbon emissions (Arwar & Lsaggaf, 2019). Based on the perspective of developed and developing countries, many researchers have conducted extensive research on urban emissions and industrial development in terms of CO2 emissions (Ke and Boqiang, 2015; Liu & Bae, 2018; Munir & Zhen, 2018; Xu & Lin, 2015). Ethiopia's urban population is growing rapidly. According to the Central Statistics Agency, the city's population is estimated to have tripled from 15.2 million in 2012 to 42.3 million in 2037. This means that it is growing at an annual rate of 3.8 percent (CSA, 2013). Rapid urban expansion can hamper demographic problems to provide jobs, infrastructure, services and housing. Poor management of these issues has challenges with environmental pressures such as CO2 emissions. As far as I know, there are currently no single study attempted to investigate this relationship or the dynamic impact of urbanization, economic growth, and industrial structure on CO2 emissions in the existing literature in Ethiopia; therefore, this study contributed to the existing literature by examining the causal linkage between urbanization, economic growth, and industrial structure on CO2 emissions in Ethiopia. The rest of the paper is structured as follows. Section 2 refers to literature on the effects of urbanization, industrial H