Resource rents and environmental pollution in developing countries: Does the quality of institutions matter?

• Published date: 01 February 2024
• Author: Elvis D. Achuo,Clovis Wendji Miamo,Clémence Zite Kouhomou
• Date: 01 February 2024
• DOI: http://doi.org/10.1111/rode.13060

REGULAR ARTICLE

Resource rents and environmental pollution

in developing countries: Does the quality

of institutions matter?

Elvis D. Achuo

1,2

|Clovis Wendji Miamo

1

|

Clémence Zite Kouhomou

1

1

University of Dschang, Dschang,

Cameroon

2

Ministry of Secondary Education,

Yaoundé, Cameroon

Correspondence

Elvis D. Achuo, University of Dschang,

Dschang, Cameroon.

Email: elvisachuo21@yahoo.com;

elratina@ymail.com

Abstract

Despite global concerted efforts to enhance environ-

mental sustainability, environmental quality has con-

tinued degrading following upsurges in carbon dioxide

(CO

2

) emissions. The rising pollution emissions in

recent decades have largely been blamed on the grow-

ing exploitation of natural resources and institutional

dynamics. Consequently, this study empirically exam-

ines the effect of resource rents on environmental pol-

lution. The system Generalised Method of Moments

approach is adopted to analyse data for a panel of

39 developing African countries over the 1996–2020

period. The key results reveal that resource rents

significantly contribute to pollution emissions in the

context of African economies. This positive relationship

between resource rents and environmental pollution is

globally validated by the various sensitivity analysis

and robustness checks. However, this relationship is

divergent for alternative measures of natural resources

and across sub-regional economic blocs. Furthermore,

the results reveal the critical role of good governance in

modulating the environmental damaging role of natu-

ral resource dependence. Besides the key findings, the

study equally highlights the importance of ICTs and

the need to increase investments in green technologies

and promote the consumption of clean energies.

Indeed, the key findings suggest that for resource rents

Received: 13 March 2023Revised: 14 August 2023Accepted: 27 September 2023

DOI: 10.1111/rode.13060

360 © 2023 John Wiley & Sons Ltd.Rev Dev Econ. 2024;28:360–387.wileyonlinelibrary.com/journal/rode

to effectively contribute to environmental sustainability

by reducing CO

2

emissions there is need for

policymakers to reinforce the legislation through the

enhancement of institutional quality. Particularly, Afri-

can governments should develop and reinforce strate-

gies aimed at curbing corruption which constitutes a

major obstacle to environmental sustainability.

KEYWORDS

CO

2

emissions, developing economies, environmental

sustainability, institutional quality, resource rents

JEL CLASSIFICATION

H11, O13, O55, Q32, Q50

1|INTRODUCTION

Climate change constitutes one of the major 21st century challenges to sustainable development

across the globe. Several efforts have been expended at the national and international levels to

curtail pollution emissions (Balsalobre-Lorente et al., 2023; Hassan et al., 2022; Jahanger

et al., 2023). Thus, the global quest to mitigate global warming and enhance environmental sus-

tainability has aroused unmatched interest among academics and policymakers in recent years.

Several researchers and policymakers have sought to unravel the underlying determinants of

environmental pollution (Hussain & Dogan, 2021; Nathaniel, 2021; Yang & Usman, 2021)in

order to design appropriate policies that can mitigate the attendant environmental concerns.

The world's determination to mitigate environmental pollution is visible among the sustainable

development goals defining the 2015–2030 global development agenda (United Nations, 2015)

as well as the Paris Agreement adopted in 2015 during the 21st Conference of the Parties, which

highlights the resolve of world economies to keep global warming below 2C and to achieve

carbon neutrality by 2050 (Achuo, Asongu, & Tchamyou, 2022; Dinga et al., 2022).

In recent decades, global CO

2

emissions have witnessed a tremendous increase from

22,110,608 kilotons to 34,344,006 kilotons between 1996 and 2019, representing a relative

growth of 66.51 percent (World Bank, 2023). The contribution to the global pollution emissions

has not been uniform across regions. Asian countries constitute the greatest polluters compared

to their African counterparts. For instance, in South Asia, CO

2

emissions have increased from

888,700 kilotons to 2,784,080 kilotons, representing a relative growth rate of 213.28 percent over

the same period. Similarly, CO

2

emissions have respectively increased by 155.22 percent and

118.67 percent in the East Asia and Pacific (EAP) and the Middle East and North Africa

(MENA) regions. However, the contribution of sub-Saharan Africa (SSA) to global CO

2

emis-

sions has remained relatively low. Specifically, CO

2

emissions in SSA have increased from

475,588 kilotons to 823,770 kilotons, representing a growth rate of 73.21 percent within the

period under consideration. However, although the current pollution emission levels in Africa

remain relatively low compared to other regions (Ayompe et al., 2021), Africa is not exempted

from the undesirable consequences of rising global pollution emissions.

ACHUO ET AL.361