Income Heterogeneity and the Environmental Kuznets Curve Turning Points: Evidence from Africa

Mark Awe Tachega,Wilhermina Ackaah,Xilong Yao,Yang Liu,Justice Gyimah,Dulal Ahmed,Mohamed Gabir

doi:10.3390/su13105634

Abstract

The concept of environmental sustainability aims to achieve economic development while achieving a sustainable environment. The inverted U-shape relationship between economic growth and environmental quality, also called Environmental Kuznets Curve (EKC), describes the correlation between economic growth and carbon emissions. This study assesses the role of agriculture and energy-related variables while evaluating the EKC threshold in 54 African economies, and income groups, according to World Bank categorization, including low income, lower-middle, upper-middle, and high-income in Africa. With 1990–2015 panel data, the results are estimated using panel cointegration, Fully Modified Ordinary Least Square (FMOLS), and granger causality tests. The results are: (1) The study validated the EKC hypothesis in the low-income, lower-, and upper-middle-income economies. However, there is no evidence of EKC in the full African and high-income panels. Furthermore, the turning points of EKC in the income group are meagerly low, showing that Africa could be turning on EKC at lower income levels. (2) The correlation between agriculture with CO2 is found positive in the high-income economy. However, agriculture has a mitigation effect on emissions in the lower-middle-income and low-income economies, and the full sample. Also, renewable energy is negatively correlated with emissions in Africa and the high-income economy. In contrast, non-renewable energy exerts a positive effect on emissions in all income groups except the low-income economies.

Highlights

In the last few years, Africa has become home to several of the world’s strongest growing economies, with an annual growth rate of 5% [1]
The few studies in Africa conducted on this phenomenon adopted an aggregate level approach, where all African nations are lumped together irrespective of their income levels. This paper addresses this lacuna by employing an integrative framework approach to examine the linkage between economic growth, agriculture added value, energy consumption, and carbon emissions within the context of the Environmental Kuznets curve (EKC) theory for Africa, considering the different income groups classified by the World Bank [20]
Newable, and renewable energy consumption are used in the literature, they are rarely

Summary

Introduction

In the last few years, Africa has become home to several of the world’s strongest growing economies, with an annual growth rate of 5% [1]. Africa’s energy consumption and carbon dioxide (CO2 ) emissions have increased due to the critical synergy between rising incomes, energy demand, and CO2 emissions [2]. The surge in energy consumption is linked to environmental pressures such as greenhouse gas (GHGs) emissions, CO2 emissions [3,4]. The. U-shaped curve assumes that environmental quality correlates directly with economic growth until a defining moment where rising economic growth induces environmental pollution decline, culminating in an inverted curve [5,6,7,8]. The Environmental Kuznets curve (EKC) describes the hypothesized inverted curve. In Africa, nations are moving from agrarian to industrialized economies, raising concerns about Africa’s contribution to the global green effect [9].

Methods

Results

Discussion

Conclusion