Development and environmental health risks: an econometric analysis for Azerbaijan

In today's world, economic development brings with it environmental problems. Today, environmental pollution, which includes water, soil and air pollution, irreversible loss of biological diversity, the gradual disappearance of natural resources such as water, fertile agricultural lands and fish are among the most serious threats to economic development and sustainable development. The environment is exposed to violence and destruction. However, little attention is paid to the significant consequences of environmental problems, including adverse effects on human health. However, as emphasized in human capital theory, healthy people are essential for economic development. Sustainable development attaches great importance to the protection of the environment for the welfare of current and future generations. The understanding of sustainable development makes the protection of natural resources and the environment the helper of development and the protector of the interests of future generations. Environmental health risks, which have become a global problem, have been the subject of investigation recently. One way of solving environmental problems caused by economic development is to identify these problems and reduce risks by ensuring a stable economic development. In the study, the relationship between economic development and environmental health risks was examined based on the period of 1995-2021 for the Azerbaijan economy. In the established econometric model, the variables of GDP per capita, carbon dioxide emissions per capita and health expenditures were used. VAR analysis, which is one of the time series methods, was used in the study. First, the econometric model was established and the stationarity of the variables in the model was examined. After it was determined that the variables were integrated to the same degree, VAR analysis was performed. As a result of the basic assumption tests for the VAR analysis, it has been determined that there is no specification error in the model. Finally, action-response graphs were examined in the study and variance decomposition analysis results were explained. As a result, it has been determined that economic development in the Azerbaijan economy, like other developing countries, causes some environmental health risks. Keywords: Development, Environment, Azerbaijan, Impulse-Response, VAR