C02 Emissions and Economic Growth: A Panel Data Analysis Evidence from Developing African Countries
Keywords:
Environment Kuznet, Africa Panel cointegration
Abstract
This paper tests the Environmental Kuznet Hypothesis using data from 23 African countries for the period 1980–2019 in the Pedroni approach to panel cointegration analysis. The evidence suggests that both real GDP and energy consumption have a substantial effect on CO2 emission in most countries studied though energy consumption has less effect. However, in most countries, as income increases, the level of emission declines consistently with the EKC hypothesis. However, the econometric result, their interpretation, and their likely policy implications have to be taken with caution since there is a high degree of heterogeneity among the countries in terms of energy consumption, real income as well as CO2 emissions. This is more so when the analysis of the trend in the growth of the three variables used in estimation and the estimated results of fully modified OLS show large divergence among countries. However, the study recommends that, since a great number of economies in the study buttressed the EKC, therefore, the current policy on growth and energy consumption may be pursued without necessarily affecting the quality of their environment. However, other countries should implement strong regulatory and market-based policies on highly energy-intensive sectors to reduce their current level of emissions and attain sustainable, environment-friendly growth.
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References
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26. Phu Nguyen-Van (2010), Energy consumption and income: A semiparametric panel data analysis Energy Economics 32 (2010) 557-563
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28. Selin Ozokcua and Ozlem Ozdemir (2017), Economic growth, energy, and environmental Kuznets curve. Renewable and Sustainable Energy Reviews 72 (2017) 639-647
29. Shaojian Wang, Qiuying Li, Chuanglin Fang and Chunshan Zhoua(2016), The relationship between economic growth, energy consumption, and CO2 emissions: Empirical evidence from China Science of the Total Environment 542, 360-371
30. Solarin SA, and Lean HH., (2016),Natural Gas Consumption, Income, Urbanization and CO2 Emissions in China and India, 2016, Environmental Science and Pollution Research, 23, 18753–18765.
31. Tan, Francis & Lean, Hooi Hooi & Khan, Habibullah. (2014). Growth and environmental quality in Singapore: Is there any trade-off?. Ecological Indicators. 47. 149-155.
32. Wajahat Alia, Azrai Abdullaha, Muhammad Azamb(2017), Re-visiting the environmental Kuznets curve hypothesis for Malaysia: Fresh evidence from ARDL bounds testing approach Renewable and Sustainable Energy Reviews, Volume 77, September 2017, 990-1000
2. American Energy Information Administration (2017), Department of Energy, USA
3. Apergis, N., Payne, J.E., (2010). Coal consumption and economic growth: Evidence from a panel of OECD countries. Energy Policy 38, 1353-1359.
4. Aqeel, A. and Butt, M.S. (2001) The Relationship between Energy Consumption and Economic Growth in Pakistan. Asia Pacific Development Journal, 8, 101-110
5. Asafu-Adjaye, J.,(2000), The relationship between energy consumption, energy prices and economic growth: time series evidence from Asian developing countries. Energy Economics 22, 615-625
6. Bartsch, U. and Muller, B.,(2000), Fossil Fuels in a Changing Climate Oxford University Press
7. Boqiang Lin, Oluwasola E. Omoju, Ngozi M. Nwakeze, Jennifer U. Okonkwo, Ebenezer T. Megbowon(2016), Journal of Cleaner Production, Volume 133, Pages 712-724
8. Breitung, J., (2000). The local power of some unit root tests for panel data, in Baltagi, B.H., Fomby, T.B., Hill, R.C. (eds) Nonstationary Panels, Panel Cointegration, and Dynamic Panels, Advances in Econometrics, Vol. 15. Elsevier Science, Amsterdam
9. Burak Sencer Atasoy(2017), Testing the environmental Kuznets curve hypothesis across the U.S. Evidence from panel mean group estimators Renewable and Sustainable Energy Reviews 77 (2017) 731-747
10. Carrion-i Silvestre, J. L., del Barrio-Castro, T., and L´opez-Bazo, E. (2005). Breaking the panels: An application to the gdp per capita. Econometrics Journal, 8:159–175
11. Choi, I., (2006). Combination unit root tests for cross-sectionally correlated panels, in Econometric Theory and Practice: Frontiers of Analysis and Applied Research: Essays in Honour of Peter C.B. Phillips, Edited by D. Corbae. S. N. Durlauf and B. Hansen, Cambridge University Press
12. Ehigiamusoe KU and Lean HH.,(2019), Effects of Energy Consumption, Economic Growth and Financial Development on Carbon Emissions: Evidence from Heterogeneous Income Groups, 2019, Environmental Science and Pollution Research, 26, 22611–22624.
13. Faisal Mehmood Mirza and Afra Kanwal(2017), Energy consumption, carbon emissions and economic growth in Pakistan: Dynamic causality analysis. Renewable and Sustainable Energy Reviews 72 (2017) 1233-1240
14. Grossman, G. M., & Krueger, A. B. (1991). Environmental impacts of a North American Free TradeAgreement. National Bureau of Economic Research Working Paper 3914, NBER, Cambridge MA.
15. Grossman, G. M. (1995). Pollution and growth: What do we know?. In I. Goldin & L. A. Winters (Eds.), the Economics of Sustainable Development (pp. 19– 47). Cambridge: Cambridge University Press.
16. Hadri, K. (2000). Testing for stationarity in heterogeneous panel data. Econometrics Journal 3, 148-161.
17. Harry Bloch, Shuddhasattwa Rafiq and Ruhul Salim (2012) Coal consumption, CO2 emission and economic growth in China: Empirical evidence and policy responses Energy Economics, 2012, vol. 34, issue 2, 518-528
18. Hooi Hooi Lean and Russell Smyth (2010), CO2 emissions, electricity consumption and output in ASEAN, 2010, Applied Energy, 87, 1858–1864.
19. Lee, Junsoo, Kyung S. Im, and Margie Tieslau (2005), Panel LM unit root tests with level shifts, Oxford Bulletin of Economics and Statistics, 67(3), 393-419
20. Levin, A., C. Lin, and C. Chu (2002), “Unit Root Tests in Panel Data: Asymptotic and Finite Sample Properties,” Journal of Econometrics, 108, 1-24
21. Nguyen-Van, Phu, 2010. "Energy consumption and income: A semiparametric panel data analysis," Energy Economics, Elsevier, vol. 32(3), pages 557-563
22. Omri, A., (2013), CO2 emissions, energy consumption and economic growth nexus in MENA countries: evidence froms imultaneous equations models. EnergyEconomics 40, 657–664
23. Paresh Kumar Narayan and Seema Narayan(2010) CO2 emissions and economic growth: Panel data evidence from developing countries Energy Policy Volume 38, Issue 1, January 2010, Pages 661-666
24. Pedroni, P. (1999). Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economic and Statistics 61, 727-731
25. Pedroni, P. (2004). Panel Cointegration, Asymptotic and Finite Sample Properties of Pooled Time Series tests with an Application to the PPP hypothesis. Econometric Theory 20, 3, 597-625
26. Phu Nguyen-Van (2010), Energy consumption and income: A semiparametric panel data analysis Energy Economics 32 (2010) 557-563
27. Sakiru Adebola Solarin, Usama Al-Mulalia, and Ilhan Ozturk(2017) Validating the environmental Kuznets curve hypothesis in Idia and China: The role of hydroelrectricity consumption. Renewable and Sustainable Energy Reviews 78 (2017) 1578-1356
28. Selin Ozokcua and Ozlem Ozdemir (2017), Economic growth, energy, and environmental Kuznets curve. Renewable and Sustainable Energy Reviews 72 (2017) 639-647
29. Shaojian Wang, Qiuying Li, Chuanglin Fang and Chunshan Zhoua(2016), The relationship between economic growth, energy consumption, and CO2 emissions: Empirical evidence from China Science of the Total Environment 542, 360-371
30. Solarin SA, and Lean HH., (2016),Natural Gas Consumption, Income, Urbanization and CO2 Emissions in China and India, 2016, Environmental Science and Pollution Research, 23, 18753–18765.
31. Tan, Francis & Lean, Hooi Hooi & Khan, Habibullah. (2014). Growth and environmental quality in Singapore: Is there any trade-off?. Ecological Indicators. 47. 149-155.
32. Wajahat Alia, Azrai Abdullaha, Muhammad Azamb(2017), Re-visiting the environmental Kuznets curve hypothesis for Malaysia: Fresh evidence from ARDL bounds testing approach Renewable and Sustainable Energy Reviews, Volume 77, September 2017, 990-1000
Published
2023-05-25
How to Cite
Saad, S., Isa, Y., Muhammed, M., & Usman, B. A. (2023). C02 Emissions and Economic Growth: A Panel Data Analysis Evidence from Developing African Countries. European Scientific Journal, ESJ, 17, 228. Retrieved from https://eujournal.org/index.php/esj/article/view/16769
Section
ESI Preprints
Copyright (c) 2023 Suleiman Saad, Yusuf Isa, Musa Muhammed, Baba Ali Usman
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
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