The Relationship Between Commercial Energy Consumption and Gross Domestic Income in Kenya

Abstract

The causal relationship between economic growth and energy consumption represents a widely studied topic in energy economics literature. Although it is well known that there is a strong correlation between energy consumption and economic growth, the issue of causality is still controversial. The paper investigated the causal relationship between energy consumption and economic growth in Kenya using published data. By using the Ganger-causality Error Correction Model, the results suggest that economic growth causes energy consumption in Kenya. The implication of the study is that energy conservation measures would not lead to negative effects on the country's economic growth.