CO 2 emissions and economic growth in sub-Saharan African countries: A panel data analysis

Abstract

This paper examines the causal relationship between CO₂ emissions and economic growth in 10 sub-Saharan African (SSA) countries. This study attempts to answer one critical question: does economic growth Granger-cause CO₂ emissions in SSA countries? Unlike some of the previous studies, this paper uses a dynamic panel data analysis procedure to examine this linkage. The results of the error-correction model (ECM)-based panel causality show that there is a unidirectional causal flow from economic growth to CO₂ emissions in the 10 studied countries. This applies irrespective of whether the causality is tested in the short run or in the long run. These findings have important implications. They demonstrate that CO₂ emissions mitigation policies are unlikely to have any adverse effects on these countries’ long-term growth paths. This implies that these countries can pursue CO₂ emission reduction policies without necessarily compromising their quest for a long-term positive growth trajectory.