Financial Development, Human Capital Development and Climate Change in East and Southern Africa (original) (raw)
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JOURNAL OF SUSTAINABILITY SCIENCE AND MANAGEMENT
The aim of this study is to revisit the validity of EKC hypothesis in six leading African countries, with interaction effect of financial development and economic growth on the quality of environment over a period of 1970 to 2019. The research used the updated version of Driscoll and Kraay model by Hoechle, which resolved the consequences of heteroscedasticity and cross-sectional dependency. The empirical results of the study reveal that the EKC hypothesis is supported in these leading African economies. Carbon emissions increase due to foreign direct investment (FDI) and energy consumption. Financial development improves the environmental quality in these leading African economies. The interactive role of financial development and economic growth increases CO 2 emissions thereby degrading the quality of environment. The study recommends that environmental policies that minimize emissions should be enforced for the purpose of making the environment cleaner, FDI should be environmentally friendly and relevant incentives are required to redirect private credits towards green projects and renewable energy development.
Journal of Cleaner Production, 2020
This study investigates the validity of the Environmental Kuznets Curve (EKC) hypothesis for six West African countries over 1970e2017 while using human capital and biocapacity as additional determinants of carbon emissions. It uses the panel quantile regression method that provides robust results in case the classical econometric assumptions fail. The empirical results revealed that a U-shaped relationship between economic growth and Carbon dioxide (CO 2) emissions holds in the low, middle and highemissions countries as opposed to the inverted U-shaped EKC hypothesis. Trade openness reduces environmental performance in low-emission countries. Financial development has mixed impacts on CO 2 emissions across the quantiles. While financial development enhances environmental quality in the low-emissions countries, it exerts a detrimental impact in the middle and high-emissions countries. Human capital has significantly positive effects on the lower, middle and upper quantiles. The obtained results highlight the need for raising environmental awareness and promoting green R&D. In addition, relevant incentives are required to redirect private credits towards green projects and renewable energy development.
Environmental Science and Pollution Research
Although West African nations are flourishing economically of late, they still have environmental issues due to the high rate of emissions in the bloc. Despite the worsening environmental condition, there have been limited studies on the causal agents of this situation in the region. Therefore, drawing strength from the United Nations' Sustainable Development Goals (SDGs) and their targeted impacts of 2030, this study explored the nexus between financial development and environmental sustainability in West Africa (WA) for the period 1990 to 2016. The cross-sectional autoregressive distributed lag (CS-ARDL) estimator alongside the cross-sectionally augmented distributed lag (CS-DL) and the cross-sectional augmented error correction (CAEC) estimators were engaged to examine the elastic effects of the explanatory variables on the explained variable and from the results, financial development was harmful to environmental sustainability in WA through high carbon emissions. Also, control variables foreign direct investments, energy consumption, industrialization, and population growth were detrimental to the sustainability of the environment. On the causal connections amid the series, a unidirectional causality from financial development and population growth to carbon emissions was uncovered. Also, feedback causalities between foreign direct investments and carbon emissions, between energy consumption and the effluents of carbon, and between industrialization and environmental pollution were unraveled. Based on the findings, the study recommended among others that the countries should integrate environmental welfare objectives into their financial development policies. Also, the nations should ensure that their citizens have access to energy that is affordable, reliable, sustainable, and modern (SDG 7). Finally, improvement in energy efficiency, sustainable infrastructure, and good use of resources (SDG 12) should be promoted by the nations. The above recommendations if seriously taken into consideration will help the region to combat climate change and its impacts, which is the focus of SDG 13. The main flaw of this exploration was the lack of data for some specific time periods. Therefore, in future when such data become available, similar investigations could be carried out to confirm the robustness of the study's results.
Frontiers in Environmental Science, 2024
Carbon emissions from anthropogenic human activities are viewed as the major cause of pollution in the environment. The Paris Treaty came into effect to help minimize the galloping rate of global ecological pollution. The surge in global emissions has prompted other nations to change their environmental regulations to help them to attain their emission mitigation agenda. For instance, China, United States and India have improved their Nationally Determined Contributions they pledged as signatories to the Paris Accord to help them to achieve their sustainable development goals But, despite nations committing to the guidelines of this accord, ecological contamination continues to rise in the globe. To help curb the above menace, a study on the connection between financial development, urbanization, economic growth, renewable energy consumption, and environmental quality of 27 countries from North, South and East Africa over the period 1990 to 2019 was conducted. In attaining this goal, econometric techniques that are robust to heterogeneity and residual cross-sectional dependence were deemed appropriate. From the preliminary analysis, the panel was heterogeneous and cross-sectionally dependent. Also, all the series were stationary after first difference and cointegrated in the long-run. On the regression estimates via the common correlated effects mean group technique, financial development improved environmental quality in the North, South and Eastern regions by 0.56%, 0.42%, and 0.44% respectively. Also,
iranian economic review, 2020
There are clear signs of climate change in Africa, while the continent has limited economic and financial muscle to generate clean, low-carbon, greener and energy-efficient production activities needed to improve environmental quality. Hence, this paper examines the impact of structural change and financial development on carbon dioxide emissions and tests whether the EKC hypothesis is supported for 31 sampled Sub-Sahara African countries between 1990 and 2017. The study utilizes the pooled mean group heterogeneous panel data. The study finds that the EKC exists for all income groups. The deterministic role of financial development is observed for low and lower-middle-income countries while the influential role of financial development was obtained for upper-middle and high-income countries. Structural change, industrialisation and agriculture increase the level of CO2 in upper-middle and high, lower-middle, and low-income countries, respectively. To minimize climate change in Afric...
2017
I would like to say a big thank you to everyone who supported, guided and encouraged the successful completion of this thesis. Firstly, my earnest gratefulness goes to my supervisor, Dr Senia NHAMO, for her constructive comments, advice, feedbacks and support with words and study materials during the course of my study. I would like to extend my thankfulness to Prof. Godwell NHAMO for his directional contribution and references when I was preparing the background of this work. Their suggestions made the form and content of this thesis to be this comprehensive.
Given the acceleration of economic changes in Sub-Saharan Africa economies (SSA), a better understanding of the relationship between economic growth and pollution is essential for policy makers. The purpose of this study is to investigate the impact of economic, financial and institutional developments on CO 2 emissions for 25 SSA countries over the period 1996e2010. We use the reduced form modeling to control unobserved heterogeneity specific to countries and the GMM dynamic panel method to control endogeneity. We found no-evidence in our investigation for the Environmental Kuznets Curve (EKC) hypothesis. Indeed, a monotonically increasing relationship with GDP is found more appropriate for CO 2 emissions. The results confirm that political stability, government effectiveness, democracy, and control of corruption influence negatively CO 2 emissions. On the contrary, regulatory quality and rule of law have a positive effect on CO 2 emissions. The results confirm the importance of institutional frameworks in reducing carbon dioxide emissions since institutional quality not only affects carbon dioxide emissions directly, but also indirectly via economic growth and trade openness.
Income Heterogeneity and the Environmental Kuznets Curve Turning Points: Evidence from Africa
Sustainability
The concept of environmental sustainability aims to achieve economic development while achieving a sustainable environment. The inverted U-shape relationship between economic growth and environmental quality, also called Environmental Kuznets Curve (EKC), describes the correlation between economic growth and carbon emissions. This study assesses the role of agriculture and energy-related variables while evaluating the EKC threshold in 54 African economies, and income groups, according to World Bank categorization, including low income, lower-middle, upper-middle, and high-income in Africa. With 1990–2015 panel data, the results are estimated using panel cointegration, Fully Modified Ordinary Least Square (FMOLS), and granger causality tests. The results are: (1) The study validated the EKC hypothesis in the low-income, lower-, and upper-middle-income economies. However, there is no evidence of EKC in the full African and high-income panels. Furthermore, the turning points of EKC in ...
Is the environmental Kuznets curve hypothesis a sound basis for environmental policy in Africa
Achieving economic development and environmental sustainability simultaneously is one of the most important development challenges for Africa today. The relationship between economic growth and environmental sustainability is founded on the environmental Kuznets curve (EKC). This paper examines the validity of the hypothesis and the driving factors of carbon dioxide (CO 2) emission in five African countries using the STIRPAT empirical model, panel cointegration and fully modified ordinary least squares. Unlike previous studies, economic development is disaggregated into agriculture and industrial economic development. The results show that there is no evidence of the validity of the hypothesis in Africa, regardless of whether economic development is driven by agriculture or industrialisation. Energy structure and energy intensity are the two major driving forces of CO 2 emissions in Africa. Population growth and urbanisation have negative relationship with CO 2 emissions. From our results, the EKC is not a sound basis for environmental policy in Africa; rather, environmental policy in Africa, specifically for CO 2 emissions mitigation, should focus on encouraging energy efficiency, enhancing the use of clean energy, incorporating the impact of population growth and harnessing the positive impacts of urbanisation.
2014
In this paper, we explore a variety of models attempting to explain the pollution-income relationship (PIR). There has been much literature addressing the notion of an environmental Kuznets curve (EKC). Many researchers find an EKC relationship for certain pollutants, while others do not find evidence of an EKC relationship. There is also literature formally critiquing the EKC. We employ cross-sectional, panel, and time-series analysis to add insight into the relationship between economic growth and environmental degradation, a research area that is far from consensual and that has practical implications. We ultimately find that the clearest case of an EKC effect in our study arises in the analysis of organic water pollution, while there is modest evidence suggesting an EKC effect with regard to CO2, NO, and methane. We also present ample evidence suggesting an anti-EKC effect for PM10. Our analysis causes us to question the existence of an EKC effect throughout the environment in general.