The impact of natural resource consumption on carbon emissions: evidence of a symmetric and asymmetric effect from Sub-Saharan Africa.

Abstract

Sub-Saharan African countries are among mineral-rich developing countries strategically competing to guarantee sustainable economic development through resource exploration. The possibility of increasing the level of carbon emission due to using low-cost fuels and high pollutants during mineral resource extraction activities leading to environmental degradation continues to draw the attention of researchers and policy makers. This research aims to analyze the response of carbon emissions in the African continent to symmetric and asymmetric shocks on resource consumption, economic growth, urbanization, and energy consumption. Following the Shin et al. (2014a) linear and nonlinear autoregressive distributed lag (ARDL) methodology in panel form, we construct symmetric and asymmetric panel ARDL-PMG model to evaluate both short- and long-run impacts of resource consumption on carbon dioxide emissions for a panel of 44 African countries over the period 2000-2019. The symmetric results show that the effect is not statistically significant despite natural resource consumption positively impacting carbon emission in the long and short runs. Energy consumption was found to affect environmental quality in the long and short runs adversely. Interestingly, economic growth was found to improve environmental quality in the long run significantly, and no significant impact was reported in the case of urbanization. However, the asymmetric results prove that a positive and negative shock to natural resource consumption contributes significantly to carbon emission, contrary to the insignificant impact established in the linear framework. The gradual growth in the manufacturing sector and an expansion in the transportation sector in Africa led to high demand and consumption of fossil fuels. This possibly accounts for the adverse effect of energy consumption on carbon emissions. Most African countries depend mainly on exploring natural resource endowment and agricultural activities to drive the growth of their economies. Due to the weak environmental regulatory frameworks in most African countries and public corruption, multinational companies (MNCs) in the extractive sector do not adhere to environmentally friendly activities. The majority of African countries are also battling illegal mining activities and illicit felling of trees, which may account for the positive relationship between natural resource rents and environmental quality reported. In terms of policy implications of the study, governments in Africa must preserve natural resources, use environmentally friendly and technologically advanced resource extraction methods, opt for green energy, and strictly apply environmental laws to promote environmental quality on the continent.