This study investigated the relationship between energy consumption, carbon dioxide emissions, and macroeconomic variables in Somalia with data
spanning from 1990 to 2019 using ARDL model. The study found a negative long-run relationship between carbon dioxide emissions and energy
consumption in Somalia, suggesting that improving access to clean energy can reduce the gradual rise of carbon dioxide emissions. The study also
found that rising industrial value-added had a significant positive impact on energy consumption. Furthermore, findings from Cholesky’s variance
decomposition showed that 13.13% of future fluctuations in energy consumption are due to shocks in carbon dioxide emission, 33.63% of future
fluctuations in carbon dioxide emissions are due to shocks in energy consumption, 40.63% of future fluctuations in industrialization are due to shocks
in energy consumption and 41.23% of future fluctuations in population are due to shocks in energy consumption. There was evidence of a bidirectional
causality between: energy consumption and population. The study suggests adding renewable energy technologies to the energy portfolio. This would
help reduce reliance on unstable energy sources and reduce the chance that changes in commodity prices will interrupt the energy supply, which
eventually would help reduce the effects of climate change.
Keywords: Energy Consumption, Industrialization, Trade Openness, Somalia and ARDL
JEL Classifications: P18, O14, Q53