Relative effects of regional and global trade on carbon emissions in ECOWAS member countries

Abstract

The effect of trade on environmental quality has always been ambiguous in both developed and developing countries. This has prompted several country- and region-specific studies. It is against this background that this study seeks to investigate the effect of international trade on carbon emissions in the ECOWAS subregion in general and specifically determines the relative effect of regional and global trade on carbon emissions. To achieve this, time series data on trade and carbon emissions from 1970 to 2014 were employed for 14 ECOWAS member countries based on data availability and the data were duly subjected to required econometric tests to prevent spurious analysis. PMG/MG method of panel ARDL was adopted to estimate the relative effect of regional and global trade on carbon emissions and this is based on capability of the method to classify relationship into short-run and long-run and also solve endogenity issues. The results from model estimation show that effect of trade on environmental quality is a long-term phenomenon and basically support the view that trade has negative effect on environmental quality. However, regional trade is less harmful and it can guarantee improved environment quality in the long run. The study therefore recommend that countries in the region should trade more with one another especially in areas where they lack competiveness as this can better guarantee a more sustainable development for the entire subregion.