TY - JOUR
T1 - Trade-induced environmental quality
T2 - the role of factor endowment and environmental regulation in Africa
AU - Twerefou, Daniel Kwabena
AU - Akpalu, Wisdom
AU - Mensah, Angela Cindy Emefa
N1 - Publisher Copyright:
© 2019, © 2019 Informa UK Limited, trading as Taylor & Francis Group.
PY - 2019/10/21
Y1 - 2019/10/21
N2 - This paper investigates whether trade liberalization affects environmental quality (proxied by CO2 emissions) and, if so, whether the trade-induced emissions originate from differences in countries’ economic growth, factor endowment or environmental regulations. We used panel data on 30 African countries and the Generalized Method of Moment estimation techniques. Though we found that trade openness is associated with elevated levels of CO2 emissions due to comparative advantage originating from factor endowment (i.e. composition effect), the overall effects of trade are seen to have some beneficial effects on environmental quality. Also, relative economic growth lowers emissions (scale effect) perhaps due to technology transfer. Furthermore, the differences in environmental regulations do not directly affect CO2 emissions while past levels of CO2 emissions significantly increase the current level due to the cumulative effect of CO2 emissions. To achieve a significant reduction in emissions, environmental regulations must be enforced in tandem with growth enhancing and production technology choice policies.
AB - This paper investigates whether trade liberalization affects environmental quality (proxied by CO2 emissions) and, if so, whether the trade-induced emissions originate from differences in countries’ economic growth, factor endowment or environmental regulations. We used panel data on 30 African countries and the Generalized Method of Moment estimation techniques. Though we found that trade openness is associated with elevated levels of CO2 emissions due to comparative advantage originating from factor endowment (i.e. composition effect), the overall effects of trade are seen to have some beneficial effects on environmental quality. Also, relative economic growth lowers emissions (scale effect) perhaps due to technology transfer. Furthermore, the differences in environmental regulations do not directly affect CO2 emissions while past levels of CO2 emissions significantly increase the current level due to the cumulative effect of CO2 emissions. To achieve a significant reduction in emissions, environmental regulations must be enforced in tandem with growth enhancing and production technology choice policies.
KW - Environmental quality
KW - carbon dioxide
KW - environmental regulation
KW - factor endowment
KW - trade openness
UR - http://www.scopus.com/inward/record.url?scp=85059965548&partnerID=8YFLogxK
U2 - 10.1080/17565529.2018.1562868
DO - 10.1080/17565529.2018.1562868
M3 - Article
AN - SCOPUS:85059965548
SN - 1756-5529
VL - 11
SP - 786
EP - 798
JO - Climate and Development
JF - Climate and Development
IS - 9
ER -