Greenhouse gasses emission and economic growth nexus of sub-Saharan Africa

Abstract

Abstract Notwithstanding the lesser contribution to global warming, sub-Saharan Africa (SSA) remained one of the most vulnerable to climate change due to low economic development, high dependence on natural resources for agricultural production and low technological advancement. There is also limited information on the nexus between economic growth and greenhouse gas emissions (GHG) in the region. Therefore, this study applied the Environmental Kuznets hypothesis to test the relationship between economic growth and GHG emissions in SSA and also test the effect of global GHG emission on economic growth of SSA. Using an aggregated panel data for the period of 1970 to 2012, a Vector Autoregressive and an Ordinary Least Square regression were estimated. From the result, although the relationship between economic growth and environmental quality was established in the short run, there are no clear turning points for the greenhouse gasses. Generally, there is a monotonic decreasing relationship between economic growth and environmental quality in the long-run. Interestingly, this study showed that global GHG emission levels have a long-run effect on the economic growth of SSA. We concluded that to ensure that economic growth leads to an improvement in environmental quality, there must be a global effort to introduce innovations and technologies that can lead to increase production with little GHG emissions. The study recommended that, SSA should consider carbon tax policies other than stringent GHG emission reduction initiatives or climate stabilization policies that would negatively affect production in the region.