The Carbon Kuznets Curve in Africa: Do Energy Consumption and Governance Really Matter?

Abstract

ABSTRACT: African countries suffer from the negative effects of climate change more severely compared to other continents, despite contributing only a small fraction of the global carbon emissions. This is attributed to at least three factors. First, Africa relies heavily on solid fuel energy sources to meet its socioeconomic needs. The use of solid fuels is associated with heavy pollution, which exposes the population to significant health risks. Second, environmental policy is less successful on the continent owing to the uncertainty caused by a lack of understanding of the scope of the environmental problem. Third, the African continent has become heedless about the consequences of climate change in its ambition for further growth to catch up with the rest of the world. In this study, we examined the roles of energy consumption and governance in explaining the carbon Kuznets curve hypothesis in African countries from 1995 to 2019. The empirical evidence provided is based on second-generation time-series analysis that accounts for cross-sectional dependency among the assessed factors. Specifically, the Westerlund cointegration approach, Cross-sectional Autoregressive Distributed Lag (CS-ARDL) simulation, Augmented Mean Group (AMG) method, and Dumitrescu and Hurlin heterogeneous panel causality tests were implemented. Together, these results confirm the validity of the CKC hypothesis for Africa. The mechanisms through which economic growth affects carbon emissions have been identified as energy consumption and governance. While it is possible to achieve a significant reduction in carbon emissions in Africa using environmental policy, there is a need to sacrifice growth to achieve desirable environmental quality. Governance arrangements need to be transparent and accountability regarding carbon regulations needs to be taken seriously. Promoting sustainable growth across Africa is important because it holds the key to accelerating global action. We recommend effective regulatory compliance monitoring and enforcement while reducing carbon emissions and advancing sustainable development through energy transitions.