Does Unemployment Affect Light Commercial Vehicle Emissions Intensity?

Abstract

This study investigates whether unemployment affects the share of greenhouse gas (GHG) emissions attributable to light commercial vehicles (LCV) in Greece over the period 2000–2023. While existing studies have primarily focused on economic growth, fuel prices, and environmental regulations as determinants of transport emissions, the role of labour market conditions has received little attention. Using annual data, the analysis employs ordinary least squares (OLS), a dynamic specification with a lagged dependent variable, and an Autoregressive Distributed Lag (ARDL) framework. The baseline model indicates no statistically significant relationship between unemployment and LCV emission share. However, once dynamic adjustment is considered, unemployment emerges as a significant determinant of LCV emission intensity. The ARDL bounds test further provides evidence of a stable long-run relationship between the variables. The results suggest that higher unemployment is associated with a larger contribution of LCV emissions to total road transport emissions, potentially reflecting reduced economic growth, slower fleet renewal, and prolonged use of older vehicles. The findings indicate that labour-market shocks can impact the decarbonization of the transport sector by affecting commercial vehicle replacement decisions. Furthermore, labour market conditions may have enduring environmental impacts.