Institutional quality, green trade and carbon emissions in sub-Saharan Africa

Abstract

Studies focusing on reducing trade-related carbon footprint by consolidating institutional quality are not much in the literature. This study examines the role of institutional quality and green trade on carbon emissions. The empirical findings are based on generalised method of moments and 45 African countries spanning the period of 2008 to 2020. The initial findings revealed that institutional quality has a neutral impact on carbon emissions but trade openness increases it. However, strengthening institutional quality towards green trade reduces carbon emissions. Precisely, strengthening institutional quality towards green trade by 1% will have a joint effect of reducing carbon emissions by 0.04%. The policy implication is that clean trade can be achieved by strengthening the region's institutions which subsequently promote environmental sustainability.