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

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

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

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