Economic growth, international trade, and environmental degradation in Sub-Saharan Africa

Abstract

PurposeThis study investigates the relationship between economic growth international trade and environmental degradation in Sub-Saharan Africa (SSA) focussing on the validity of the environmental Kuznets hypothesis (EKC), the pollution havens hypothesis (PHH) and the factor endowment hypothesis (FEH).Design/methodology/approachThe study uses annual data for 41 SSA countries for the period between 1990 and 2017 and employs the bias-corrected least square dummy variable (LSDVC) estimation techniques. Environmental degradation is indicated by carbon dioxide (CO2) and fine particulate matter (PM2.5) emissions as well as deforestation.FindingsThe results confirm the validity of the EKC hypothesis for PM2.5 emissions and deforestation but not for CO2 emissions. The results also indicate that international trade reduces deforestation and that both the PHH and FEH are valid for CO2 emission but not for PM2.5 emissions and deforestation.Practical implicationsIn this paper, the authors are able to illustrate that both economic growth and international trade can be harmful to the environment if unchecked. Therefore, conclusion of this study offers policy options through which SSA countries can achieve desired economic growth goals without affecting environmental quality. The study can be a benchmark for environmental policy in the region.Originality/valueThe authors provide an in-depth discussion of the growth-trade-environmental degradation nexus in SSA. The validity of the EKC, PHH, and FEH confirm that economic growth remains a threat to the local natural environment in SSA. Hence, the need for a trade-off between economic growth needs and environmental degradation and understanding where to compromise to achieve SSA's economic development priorities.