The relationship between good governance and CO2 emissions in oil- and non-oil-producing countries: a dynamic panel study of sub-Saharan Africa.

Abstract

This study empirically examined the relationship between CO2 emissions and good governance in oil- and non-oil-producing countries in the SSA region. The findings from this paper revealed very interesting results proving that good governance has a negative relationship with CO2 emissions. Oil-producing countries have good governance system to help control and reduce CO2 emissions as compared to non-oil-producing countries. Particularly, in oil-producing countries, business regulatory environment, budget and fiscal management, as well as fiscal policy have a significant negative relationship with CO2 emissions. But there is rather a positive relationship between these indicators and CO2 emissions in non-oil-producing countries as they do not have the required structures and arrangements to control CO2 emissions. Also, in oil-producing countries, property rights and rules have positive relationship with CO2 emissions but in the case of non-oil-producing countries, there is a negative relationship, meaning that non-oil-producing countries have good legal system and rule-based governance structures that is capable of protecting property rights. There is positive relationship between quality of government administration and CO2 emissions in oil-producing countries but negative for non-oil-producing countries. Trade liberalization and economic growth have positive relationship with CO2 emissions in both categories. But urbanization has a negative relationship with CO2 emissions in non-oil-producing countries but positive for oil-producing. The findings point that effective and efficient institutions is a vital element for SSA countries to help combat the increased emissions of CO2 to engender growth.