Trade and Climate Variability in the Economic Community of West African States (ECOWAS)

Abstract

The study examined whether trade causes climate variability in the Economic Community of West African States (ECOWAS). Specifically, it investigated the impact of trade (% GDP) on climate variability indicators such as CO2, N2O, and PM2.5. The study followed Frankel debate on environment effect of trade with modification on the N2O variable rather than the SO2 used in Frankel (2003). The study employed random effect regression on data collected from World Bank indicators from 2010-2021. The study found that trade in ECOWAS cause climate variability (CO2, N2O). However, the trade effect on PM2.5 shows a decreasing relationship. The study observed scale, income and composition effect of growth on the time- varying behaviour of climate in the ECOWAS. Thus, the EKC theory was found to be present in ECOWAS. Thus, an appropriate carbon tax laws would help prevent cross border trade on dirty goods and carbon leakages associated with lax environmental control.