The determinants and interrelationship of carbon emissions and economic growth in African economies: Fresh insights from static and dynamic models

• Published date: 01 February 2021
• Author: Solomon Nathaniel,Suborna Barua,Hamid Hussain,Ngozi Adeleye
• Date: 01 February 2021
• DOI: http://doi.org/10.1002/pa.2141

ACADEMIC PAPER

The determinants and interrelationship of carbon emissions

and economic growth in African economies: Fresh insights

from static and dynamic models

Solomon Nathaniel

1

| Suborna Barua

2

| Hamid Hussain

3

| Ngozi Adeleye

4

1

Department of Economics, University of

Lagos, Akoka, Nigeria

2

Department of International Business,

University of Dhaka, Dhaka, Bangladesh

3

Department of Economics and Finance,

Institute of Business Administration, Karachi,

Pakistan

4

Department of Economics and Development

Studies, Covenant University, Ota, Ogun State,

Nigeria

Correspondence

Solomon Nathaniel, Department of Economics,

University of Lagos, Akoka, Nigeria.

Email: nathaniel_solomon21@yahoo.com

This study explores the interrelationship between CO

2

emissions and economic

growth in selected Africa economies from 1990 to 2014 providing evidence from

both static and dynamic models. Results show that increases in energy use have a

significant and positive effect on economic growth; which goes to show that growth

in Africa is actually energy dependent. Further findings suggest that CO

2

emissions

have no significant contemporaneous effect, however, a significant and negative

effect at a one-period lag on economic growth. The significance of the impacts is

consistently confirmed by both the static and dynamic estimations. Also, trade adds

to economic growth and also contributes to environmental deterioration in Africa.

There is a dire need for Africa to adjust its energy portfolio by shifting to clean

energy sources which will enhance sustainable economic growth without deteriorat-

ing the environment.

1|INTRODUCTION

According to the World Bank (2017), at least, about 14% of the peo-

ple living in the world live in SSA, and Africa is the second most popu-

lated continent behind Asia. For the past few decades, an increase in

growth/development and population witnessed in the world has been

unprecedented. Urbanization and industrialization have been the key

drivers of this phenomenon increase (Dong, Jiang, Sun, & Dong, 2019;

Nathaniel et al., 2019). This increase is however at a cost. It results in

more energy (nonrenewable) demand. This explains why global energy

demand has increased to 13,105.0 (Mtoe) in 2015 from 6,642.3 in

1980 (BP, 2017). On the flip side, the global CO

2

concentration in the

atmosphere also increased to 404.7 ppm in 2016 (ESRL, 2017). In the

same year, global temperature increased by 1.26C (Hansen

et al., 2017). The concomitant upward surge in energy use (EUS) and

urbanization has done no good to the environment especially in terms

of CO

2

emissions (Dong, Sun, Li, & Liao, 2018; Shen et al., 2018;

Shuai, Chen, Wu, Zhang, & Tan, 2019; Shuai, Shen, Jiao, Wu, &

Tan, 2017). Between 2000 and 2017, the growth in urban population

(in Africa) has increased from 30.8% to 38.8%. Also, the GDP growth

rate of the region average of 2.2% between 2015 and 2017 (Wang &

Dong, 2019).

The urgent need to make the environment habitable for

humanity caused 196 countries to not only support but also join

the United Nations Framework Convention on Climate Change

(UNFCCC) in 2015. Countries in support of the UNFCCC have

been holding a series of meeting since 1995 on the steps needed

to abate global warming. One notable outcome of their meetings

was the birth of the Kyoto Protocol in 1997. The protocol initiated

binding obligations, especially for developed countries, to reduce

their emissions. Good as it seems, this agreement was never a

global one as the special focus was on the European Union and

other few developed countries leaving out the top emitters like,

the United States, India, and Canada who failed to ratify the agree-

ment. Subsequently, parties of the UNFCCC, consisting more than

194 countries, adopted the Paris Agreement on December 2015

with the willingness to reduce GHGs well below 2C by 2,100. This

is, however, becoming doubtful with the passing of each day hold-

ing to the withdrawal of the United States (on June 1, 2017) from

the agreement. The United States claimed that the agreement

empowers other nations at the expense of the United States.

Whichever way the coin turns out, the Paris Agreement was a

landmark achievement, and adhering strictly to it, is germane for

environmental sustainability. With this achievement, global

Received: 3 October 2019 Revised: 1 November 2019 Accepted: 17 March 2020

DOI: 10.1002/pa.2141

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https://doi.org/10.1002/pa.2141