Nexus between Resource Utilization and Environmental Pollution: Evidence from 23 Countries in Africa

Abstract

As Africa becomes more open to trade and globalization, emissions in the region continue to increase steadily. In the context of the prevailing economic and political conditions in Africa, it is anticipated that climate change shocks will impede developmental progress and hinder economic growth within the region. This research endeavors to empirically investigate the interconnections among GDP per capita, renewable energy consumption, freshwater withdrawals, forest area, and greenhouse gas emissions across 23 African nations from 2001 to 2020. The analytical framework incorporates the Pedroni cointegration test and the Fully Modified Ordinary Least Squares (FMOLS) method to establish a durable relationship among the variables under scrutiny.

The outcomes of our investigation disclose that a 1% escalation in GDP per capita and freshwater withdrawals corresponds to an 87.75% and 16.93% increase in greenhouse gas emissions, respectively. Conversely, a 1% rise in renewable energy consumption and forest area manifests a decline in greenhouse gas emissions by 58.51% and 13.24%, respectively. The examination reveals a negative coefficient for GDP per capita squared, affirming the validity of the Environmental Kuznets Curve (EKC) hypothesis. Furthermore, the Pairwise causality test indicates bidirectional causation between renewable energy consumption and greenhouse gas emissions and between renewable energy consumption and GDP per capita. Additionally, unidirectional causality exists from GDP per capita to greenhouse gas emissions, freshwater withdrawals to GDP per capita, forest area to GDP per capita, and freshwater withdrawals to forest area. The study recommends the sustainable use of resources in order to achieve low emissions.