A recent study by Osayande, M., & Omena, A. O. (2024) titled “ECONOMIC GROWTH AND CARBON EMISSION POLLUTION: TESTING THE ENVIRONMENTAL–KUZNETS CURVE HYPOTHESIS IN NIGERIA AND GHANA” published in African Banking and Finance Review-Journal, shows that economic growth activities increase carbon emission (CE) in Nigeria both in the short and long run, while in Ghana, economic growth activities decrease CE in both periods.
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Economic growth affects carbon emissions differently in Nigeria and Ghana over time– Osayande, M., & Omena, A. O. 2024
The study explores the intricate relationship between economic growth and carbon emission pollution in Nigeria and Ghana, specifically testing the Environmental-Kuznets Curve (EKC) hypothesis. The study investigates the dynamic link between economic growth, measured by the Gross Domestic Product (GDP) growth rate, and carbon emissions from 1980 to 2021. This analysis is crucial as it helps to understand how economic activities influence environmental sustainability in these two West African countries over a significant period. The EKC hypothesis posits that as an economy grows, environmental degradation initially increases, but after reaching a certain level of income per capita, the trend reverses, leading to improvements in environmental quality. This results in an inverted U-shaped relationship between economic growth and environmental degradation. The study seeks to determine whether this hypothesis holds true for Nigeria and Ghana.
How the Study was Conducted
The study adopted a longitudinal survey research design, focusing on Nigeria and Ghana within the ECOWAS sub-region. Data spanning from 1980 to 2021 were obtained from the World Bank Development Indicators (WBDI) database. The study examined the impact of economic growth on carbon emission using a functional model that included variables such as trade openness, human capital investment, and electricity consumption. Descriptive statistics, correlation analysis, and the ECM Auto Regressive Distributed Lag (ARDL) estimation techniques were employed to analyze the data and test the Environmental Kuznets Curve hypothesis.
What the Authors Found
The authors found that economic growth activities increase carbon emission (CE) in Nigeria both in the short and long run, while in Ghana, economic growth activities decrease CE in both periods. The study also posits that in Nigeria, electricity consumption significantly reduced CE in the long run, whereas in Ghana, human capital investment significantly reduced CE in the long run. The study shows no evidence of the EKC hypothesis being valid in either Nigeria or Ghana.
Why is this Important
Economic and Environmental Impact: The study examines how economic activities affect carbon emissions, which is crucial for understanding the environmental impact of economic growth.
Policy Implications: The findings can inform government policies on sustainable development, industrial technology, and environmental protection.
Regional Significance: It focuses on Nigeria and Ghana, providing insights into the environmental challenges and progress in West Africa.
Scientific Contribution: The research adds to the academic literature on the EKC hypothesis, offering empirical evidence from a cross-country perspective.
What the Authors Recommend
- The authors suggest that policymakers should focus on sustainable development that considers both economic growth and environmental impact. Striking a balance is essential to avoid detrimental effects on the environment.
- Encouraging investment in clean technologies and promoting eco-friendly practices can help mitigate carbon emissions. The authors recommend that governments and industries should prioritize research and development in this area.
- Regular monitoring of carbon emissions and implementing effective regulations are crucial. Policies should incentivize environmentally friendly practices while discouraging harmful ones.
- The study highlights the differences between Nigeria and Ghana. The authors further suggest that Policymakers should tailor their approaches to address specific regional challenges and opportunities.
In conclusion, the study underscores the complex interplay between economic growth and environmental sustainability in Nigeria and Ghana. While challenging the applicability of the Environmental Kuznets Curve hypothesis in these contexts, it highlights the critical need for tailored policies that balance economic development with environmental stewardship. By promoting clean technologies, fostering sustainable practices, and enhancing regulatory frameworks, policymakers can pave the way for a more resilient and eco-friendly future in West Africa and beyond.
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