Economic Growth and Carbon Dioxide Emissions in East African Countries: A Pooled Mean Group Approach

Ghirmai Tesfamariam Teame; Amine Teclay Habte

doi:doi:10.11648/j.ijber.20200904.11

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Economic Growth and Carbon Dioxide Emissions in East African Countries: A Pooled Mean Group Approach

Ghirmai Tesfamariam Teame, Amine Teclay Habte

Published in International Journal of Business and Economics Research (Volume 9, Issue 4)

Received: 8 May 2020 Accepted: 25 May 2020 Published: 3 June 2020

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Abstract

In recent years, due to factors such as increases in greenhouse gas (GHG) and carbon dioxide (CO₂) emissions, global warming and climate changes has become a major threat for all countries. However, contrary to the deep-seated belief that human impact on the environment is negative and progressive, recent empirical research shows that certain types of pollutants follow an inverted-U shape or Environmental Kuznets curve (EKC), as income grows. The EKC hypothesis postulates that environmental degradation (pollution) increases up to a certain level, as income goes up; after that, it decreases. Thus, using the EKC hypothesis as a theoretical framework and applying Pooled Mean Group (PMG) approach, this paper examines the nexus between CO₂ emissions, economic growth, Foreign Direct Investment (FDI) and total population. The study uses panel data of 12 East African countries over the period 1981–2016. Our empirical result shows that there exists a monotonically increasing relationship between CO₂ emissions and economic growth both in the short-run and long-run, contrary to what is claimed by the EKC hypothesis. Moreover, per capita CO₂ emissions increase positively with respect to FDI and total population in the long-run. The result of the study also reports the existence of unidirectional causalities running from per capita GDP, FDI and total population to per capita CO₂ emissions in the long-run, while unidirectional short-run causalities was observed from GDP and FDI to CO₂ emissions, without any feedback effects. Therefore, these unidirectional causalities imply that CO₂ emission reduction or abatement measures can be implemented without having any adverse effect on the real output growth or economic growth, in East Africa.

Published in	International Journal of Business and Economics Research (Volume 9, Issue 4)
DOI	10.11648/j.ijber.20200904.11
Page(s)	160-169
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2020. Published by Science Publishing Group

Keywords

Economic Growth, CO₂ Emissions, Pooled Mean Group, Environmental Kuznets Curve, Causality, East Africa

References

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Ghirmai Tesfamariam Teame, Amine Teclay Habte. (2020). Economic Growth and Carbon Dioxide Emissions in East African Countries: A Pooled Mean Group Approach. International Journal of Business and Economics Research, 9(4), 160-169. https://doi.org/10.11648/j.ijber.20200904.11

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Ghirmai Tesfamariam Teame; Amine Teclay Habte. Economic Growth and Carbon Dioxide Emissions in East African Countries: A Pooled Mean Group Approach. Int. J. Bus. Econ. Res. 2020, 9(4), 160-169. doi: 10.11648/j.ijber.20200904.11

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Ghirmai Tesfamariam Teame, Amine Teclay Habte. Economic Growth and Carbon Dioxide Emissions in East African Countries: A Pooled Mean Group Approach. Int J Bus Econ Res. 2020;9(4):160-169. doi: 10.11648/j.ijber.20200904.11

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@article{10.11648/j.ijber.20200904.11,
  author = {Ghirmai Tesfamariam Teame and Amine Teclay Habte},
  title = {Economic Growth and Carbon Dioxide Emissions in East African Countries: A Pooled Mean Group Approach},
  journal = {International Journal of Business and Economics Research},
  volume = {9},
  number = {4},
  pages = {160-169},
  doi = {10.11648/j.ijber.20200904.11},
  url = {https://doi.org/10.11648/j.ijber.20200904.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20200904.11},
  abstract = {In recent years, due to factors such as increases in greenhouse gas (GHG) and carbon dioxide (CO2) emissions, global warming and climate changes has become a major threat for all countries. However, contrary to the deep-seated belief that human impact on the environment is negative and progressive, recent empirical research shows that certain types of pollutants follow an inverted-U shape or Environmental Kuznets curve (EKC), as income grows. The EKC hypothesis postulates that environmental degradation (pollution) increases up to a certain level, as income goes up; after that, it decreases. Thus, using the EKC hypothesis as a theoretical framework and applying Pooled Mean Group (PMG) approach, this paper examines the nexus between CO2 emissions, economic growth, Foreign Direct Investment (FDI) and total population. The study uses panel data of 12 East African countries over the period 1981–2016. Our empirical result shows that there exists a monotonically increasing relationship between CO2 emissions and economic growth both in the short-run and long-run, contrary to what is claimed by the EKC hypothesis. Moreover, per capita CO2 emissions increase positively with respect to FDI and total population in the long-run. The result of the study also reports the existence of unidirectional causalities running from per capita GDP, FDI and total population to per capita CO2 emissions in the long-run, while unidirectional short-run causalities was observed from GDP and FDI to CO2 emissions, without any feedback effects. Therefore, these unidirectional causalities imply that CO2 emission reduction or abatement measures can be implemented without having any adverse effect on the real output growth or economic growth, in East Africa.},
 year = {2020}
}

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TY  - JOUR
T1  - Economic Growth and Carbon Dioxide Emissions in East African Countries: A Pooled Mean Group Approach
AU  - Ghirmai Tesfamariam Teame
AU  - Amine Teclay Habte
Y1  - 2020/06/03
PY  - 2020
N1  - https://doi.org/10.11648/j.ijber.20200904.11
DO  - 10.11648/j.ijber.20200904.11
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 160
EP  - 169
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20200904.11
AB  - In recent years, due to factors such as increases in greenhouse gas (GHG) and carbon dioxide (CO2) emissions, global warming and climate changes has become a major threat for all countries. However, contrary to the deep-seated belief that human impact on the environment is negative and progressive, recent empirical research shows that certain types of pollutants follow an inverted-U shape or Environmental Kuznets curve (EKC), as income grows. The EKC hypothesis postulates that environmental degradation (pollution) increases up to a certain level, as income goes up; after that, it decreases. Thus, using the EKC hypothesis as a theoretical framework and applying Pooled Mean Group (PMG) approach, this paper examines the nexus between CO2 emissions, economic growth, Foreign Direct Investment (FDI) and total population. The study uses panel data of 12 East African countries over the period 1981–2016. Our empirical result shows that there exists a monotonically increasing relationship between CO2 emissions and economic growth both in the short-run and long-run, contrary to what is claimed by the EKC hypothesis. Moreover, per capita CO2 emissions increase positively with respect to FDI and total population in the long-run. The result of the study also reports the existence of unidirectional causalities running from per capita GDP, FDI and total population to per capita CO2 emissions in the long-run, while unidirectional short-run causalities was observed from GDP and FDI to CO2 emissions, without any feedback effects. Therefore, these unidirectional causalities imply that CO2 emission reduction or abatement measures can be implemented without having any adverse effect on the real output growth or economic growth, in East Africa.
VL  - 9
IS  - 4
ER  -

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Author Information

Ghirmai Tesfamariam Teame

Department of Economics and Finance, College of Business and Social Sciences, Adi-Keih, Eritrea
Amine Teclay Habte

Department of Economics and Finance, College of Business and Social Sciences, Adi-Keih, Eritrea

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Ghirmai Tesfamariam Teame, Amine Teclay Habte. (2020). Economic Growth and Carbon Dioxide Emissions in East African Countries: A Pooled Mean Group Approach. International Journal of Business and Economics Research, 9(4), 160-169. https://doi.org/10.11648/j.ijber.20200904.11

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ACS Style

Ghirmai Tesfamariam Teame; Amine Teclay Habte. Economic Growth and Carbon Dioxide Emissions in East African Countries: A Pooled Mean Group Approach. Int. J. Bus. Econ. Res. 2020, 9(4), 160-169. doi: 10.11648/j.ijber.20200904.11

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AMA Style

Ghirmai Tesfamariam Teame, Amine Teclay Habte. Economic Growth and Carbon Dioxide Emissions in East African Countries: A Pooled Mean Group Approach. Int J Bus Econ Res. 2020;9(4):160-169. doi: 10.11648/j.ijber.20200904.11

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@article{10.11648/j.ijber.20200904.11,
  author = {Ghirmai Tesfamariam Teame and Amine Teclay Habte},
  title = {Economic Growth and Carbon Dioxide Emissions in East African Countries: A Pooled Mean Group Approach},
  journal = {International Journal of Business and Economics Research},
  volume = {9},
  number = {4},
  pages = {160-169},
  doi = {10.11648/j.ijber.20200904.11},
  url = {https://doi.org/10.11648/j.ijber.20200904.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20200904.11},
  abstract = {In recent years, due to factors such as increases in greenhouse gas (GHG) and carbon dioxide (CO2) emissions, global warming and climate changes has become a major threat for all countries. However, contrary to the deep-seated belief that human impact on the environment is negative and progressive, recent empirical research shows that certain types of pollutants follow an inverted-U shape or Environmental Kuznets curve (EKC), as income grows. The EKC hypothesis postulates that environmental degradation (pollution) increases up to a certain level, as income goes up; after that, it decreases. Thus, using the EKC hypothesis as a theoretical framework and applying Pooled Mean Group (PMG) approach, this paper examines the nexus between CO2 emissions, economic growth, Foreign Direct Investment (FDI) and total population. The study uses panel data of 12 East African countries over the period 1981–2016. Our empirical result shows that there exists a monotonically increasing relationship between CO2 emissions and economic growth both in the short-run and long-run, contrary to what is claimed by the EKC hypothesis. Moreover, per capita CO2 emissions increase positively with respect to FDI and total population in the long-run. The result of the study also reports the existence of unidirectional causalities running from per capita GDP, FDI and total population to per capita CO2 emissions in the long-run, while unidirectional short-run causalities was observed from GDP and FDI to CO2 emissions, without any feedback effects. Therefore, these unidirectional causalities imply that CO2 emission reduction or abatement measures can be implemented without having any adverse effect on the real output growth or economic growth, in East Africa.},
 year = {2020}
}

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TY  - JOUR
T1  - Economic Growth and Carbon Dioxide Emissions in East African Countries: A Pooled Mean Group Approach
AU  - Ghirmai Tesfamariam Teame
AU  - Amine Teclay Habte
Y1  - 2020/06/03
PY  - 2020
N1  - https://doi.org/10.11648/j.ijber.20200904.11
DO  - 10.11648/j.ijber.20200904.11
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 160
EP  - 169
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20200904.11
AB  - In recent years, due to factors such as increases in greenhouse gas (GHG) and carbon dioxide (CO2) emissions, global warming and climate changes has become a major threat for all countries. However, contrary to the deep-seated belief that human impact on the environment is negative and progressive, recent empirical research shows that certain types of pollutants follow an inverted-U shape or Environmental Kuznets curve (EKC), as income grows. The EKC hypothesis postulates that environmental degradation (pollution) increases up to a certain level, as income goes up; after that, it decreases. Thus, using the EKC hypothesis as a theoretical framework and applying Pooled Mean Group (PMG) approach, this paper examines the nexus between CO2 emissions, economic growth, Foreign Direct Investment (FDI) and total population. The study uses panel data of 12 East African countries over the period 1981–2016. Our empirical result shows that there exists a monotonically increasing relationship between CO2 emissions and economic growth both in the short-run and long-run, contrary to what is claimed by the EKC hypothesis. Moreover, per capita CO2 emissions increase positively with respect to FDI and total population in the long-run. The result of the study also reports the existence of unidirectional causalities running from per capita GDP, FDI and total population to per capita CO2 emissions in the long-run, while unidirectional short-run causalities was observed from GDP and FDI to CO2 emissions, without any feedback effects. Therefore, these unidirectional causalities imply that CO2 emission reduction or abatement measures can be implemented without having any adverse effect on the real output growth or economic growth, in East Africa.
VL  - 9
IS  - 4
ER  -

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