The Relationship Between Net Trade and Carbon Dioxide Emissions in Africa

Abstract

We study the net impacts of international trade on carbon dioxide (CO2) emissions in African countries at different income groupings and other driving forces of environmental impacts (CO2 emissions) using an augmented STIRPATN model. The continent experienced a large growth in carbon dioxide emissions of about 701.88% between 1960 and 2010, and this provoked our interest in the study. We identify the key driving forces to be net trade, population density, final consumption expenditure (annual growth), manufacturing sector and services sector. We also found that the services sector consistently show lowcarbon emission impacts particularly in low middle income countries in Africa (LIMCA) and upper income countries in Africa (UICA). Indicating that a shift from highly depended manufacturing economies that suggest increasing-carbon economies in both LIMC and UICA to services economies is vital in order to strive for a low-carbon economies in the continent. The coefficient for net trade stands out explicitly significant and positive for all the income groupings. The findings show that the average effect of net trade over CO2, when the net trade changes across time and between countries increases by 1%, CO2 emissions increases by about 1.68%, 2.45% and 1.01% for LICA, LMICA and UICA respectively, when all other predictors are constant.