Econometric Analysis of Influences of Trade Openness, Economic Growth and Urbanization on Greenhouse Gas Emission in Africa (1960-2010)

Abstract

This study investigated the influences of economic growth, increased urbanization and trade openness on carbon dioxide (CO₂) emissions in Africa. The study used time series data accessed from World Bank Data Base and Environmental Information Association (EIA) covering 51 years (1960-2010). The data were subjected to various econometric tests including Unit root tests before applying the bound test for cointegration using Autoregressive Distributed Lag (ARDL). It was found that GDP growth rate (p<0.05) and trade openness (p<0.05) were the major long-run and short-run determinants of emissions (Green House Gas emissions) on the continent. The findings which agreed with other environmental economists’ and Kuznet’s postulation informed us to recommend that African countries should begin to take proactive measures that will bring about green economy on the continent.

Keywords: Green House Gas Emission in Africa, Economic Growth, Trade Openness, Urbanization