The study examines the impacts of urbanization, energy consumption and real GDP on atmospheric pollution from automobile transport in Azerbaijan in the STIRPAT framework. Since the study uses time series variables the unit root properties of employed variables are tested for non-stationarity. Stationarity of the data is tested using conventional Augmented Dickey-Fuller test. The study employs Autoregressive Distributed Lags Bounds Testing (ARDLBT) approach to co-integration. This method is one of the most preferable approaches among alternatives in the case of small samples. Estimation results indicated that the variables are cointegrated, in another word there is a long-run relationship among them. In order to test the quality of the model residuals of the model are tested for the serial correlation, heteroskedasticity, and normality. The model is checked for model misspecification and stability. The results of all abovementioned tests are found to be adequate. The highest impact on pollution among the variables belongs to urbanization which is found to be positive and statistically significant. Energy consumption also has a positive and statistically significant impact on emission. The results also confirm that sustainable development can be reached only keeping the balance among environmental, social and economic factors. Findings of the study may be useful in making appropriate decisions in the fields of diminishing atmospheric pollution from automobile transport caused by urbanization related issues.
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