Pollution emission and institutions nexus in Africa

Mignamissi, Dieudonné (2020): Pollution emission and institutions nexus in Africa.

Abstract

This paper tests the pollution emissions and institutions quality nexus in Africa, through political regime and governance indicators. We apply the system GMM estimator on a dynamic panel of 50 African countries over the period 1990-2014. The key finding suggests that a reinforcement of legislation through the improvement of institutional quality has a negative and significant effect on pollution emissions. Moreover, the findings validate the Environmental Kuznets Curve hypothesis in Africa. The results call for some policy recommendations in environmental regulation for African economies, including strengthening of institutional quality, adoption of specialized investment promotion agencies on the attractiveness of green FDI, implementation of incentive mechanisms in favour of companies that have adopted greening program of their activities

• Item Type: MPRA Paper
• Language: English
• Keywords: Pollution emissions, institutions, Africa
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q52 - Pollution Control Adoption and Costs ; Distributional Effects ; Employment Effects; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth

References

Abid M. (2017), Does economic, financial and institutional developments matter for environmental quality? A comparative analysis of EU and MEA countries, Journal of Environmental Management 188, 183-194. Acemoglu, D., Johnson, S., & Robinson, J. (2005). “Institutions as a Fundamental Cause of long-run growth”. In Philippe Aghion, and Steven Durlauf (ed.), Handbook of Economic Growth 1, pp. 385-472. Ahmad, A., Y. Zhao, M. Shahbaz, S. Bano, Z. Zhanga, S. Wang, Y. Liu (2016) “Carbon emissions, energy consumption and economic growth: An aggregate and disaggregate analysis of the Indian economy”, Energy Policy 96, 131–143. Ahmed, K. and W. Long (2012) “Environmental Kuznets curve and Pakistan: An Empirical Analysis”, Procedia Economics and Finance 1, 4–13. Aldy, J. E. (2005) “An Environmental Kuznets Curve Analysis of U.S. State-Level Carbon Dioxide Emissions”, The Journal of Environment Development, 14 (1), 48–72. Andersson F. N.G. (2018), International trade and carbon emissions: The role of Chinese institutional and policy reforms, Journal of Environmental Management 205, 29-39. Antonakakis, N., I. Chatziantoniou and G. Filis (2017) ‘‘Energy consumption, CO2 emissions, and economic growth: An ethical dilemma”. Renew. Sust. Energ. Rev. 68, 808–824. Arellano, M. and O. Bover (1995) “Another look at the instrumental variables estimation of error components models”, Journal of Econometrics, 68, 9–51. Arellano, M. and S. Bond (1991) “Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations”, Review of Economic Studies, 58, 277–297. Asiedu, E. (2004) “Policy Reform and Foreign Direct Investment in Africa: Absolute Progress but relative Decline”, Development Policy Review, 22(1), 54–79. Asumadu Sarkodie S. and S. Adams (2018) “Renewable energy, nuclear energy, and environmental pollution: Accounting for political institutional quality in South Africa”, Science of The Total Environment, 643, 1: 1590–1601. Bernauer T. and V. Koubi (2009), Effects of political institutions on air quality, Ecological Economics 68, 1355 – 1365. Blundell, R. and S. Bond (1998) “Initial conditions and moment restrictions in dynamic panel data models”, Journal of Econometrics, 87, 11–143. Borhan, H., E.M. Ahmed and M. Hitam (2012) “The Impact of CO2 on Economic Growth in Asean 8”, Procedia-Social Behavioral Sciences 35: 389-397. Canas, A., P. Ferrao, and P. Conceicao (2003) “A new environmental Kuznets curve? Relationship between direct material input and income per capita: evidence from industrialised countries”, Ecological Economics 46, 217–229. Clark, B., A. K. Jorgenson and D. Auerbach (2012) “Up in Smoke: The Human Ecology and Political Ecoomy of Coal Consumption”, Organization Environment, 25 (4), 452–469. Cole, M. A. (2007) “Corruption, income and the environment: An empirical analysis”, Ecological Economics, 62(3-4), 637–647. Cole, M. A., A. J. Rayner and J. M. Bates (1997) “The environmental Kuznets curve: An empirical analysis”, Environment and Development Economics, 2(4), 401–416. Cole, M.A. (2004) “Trade, the pollution haven hypothesis and the environmental Kuznets curve: examining the linkages”, Ecological Economics 48 (1), 71–81. Cynthia Lin, C.-Y. and Z. D. Liscow (2013) “Endogeneity in the Environmental Kuznets Curve: An Instrumental Variables Approach”, Am. J. Agr. Econ., 95 (2), 268–274. Daddi T., F. Testa, M. Frey, and F. Iraldo (2016), Exploring the link between institutional pressures and environmental management systems effectiveness: An empiric al study, Journal of Environmental Management, 1-10. Dinda S. (2004) “Environmental Kuznets Curve Hypothesis: A Survey Ecological Economics”, Ecological Economics, 49, 431–455. Esteve, V. and C. Tamarit (2012) “Threshold cointegration and nonlinear adjustment between CO2 and income: The Environmental Kuznets Curve in Spain, 1857-2007”, Energy Economics 34, 2148–2156. Fairbrother, M. (2013) “Rich People, Poor People, and Environmental Concern: Evidence across Nations and Time”, Eur Sociol Rev., 29 (5), 910–922. Focacci, A. (2005) “Empirical analysis of the environmental and energy policies in some developing countries using widely employed macroeconomic indicators: the cases of Brazil, China and India”, Energy Policy 33, 543–554. Gani A., (2013),"The effect of trade and institutions on pollution in the Arab countries", Journal of International Trade Law and Policy, 12 (2) pp. 154 – 168. Gassebner, M., M. J. Lamla and J.-E. Sturm (2011) “Determinants of pollution: what do we really know?”, Oxf Econ Pap., 63 (3), 568–595. Goel R. K., R. Herrala, U. Mazhar (2013), Institutional quality and environmental pollution: MENA countries versus the rest of the world, Economic Systems 37, 508–521. Goel, R. K., R. Herrala, and U. Mazhar (2013) “Institutional quality and environmental pollution: MENA countries versus the rest of the world”, Economic Systems, 37(4), 508–521. Grossman, G. M. and A.B. Krueger (1995) “Economic Growth and the Environment”, Quarterly Journal of Economics, 110 (2), 353–377. Halicioglu, F. and N. Ketenci (2016) “The impact of international trade on environmental quality: The case of transition countries”, Energy, 109, 1130–1138. Heidari, H., S. Turan Katircioǧlu and L. Saeidpour (2015) « Economic growth, CO2 emissions, and energy consumption in the five ASEAN countries”, Int. J. Electr. Power Energy Syst. 64, 785 –791. Holian, M. J. (2014) “The Effect of Social and Economic Development on Air Pollution in Indian Cities”, Environment and Urbanization Asia, 5 (1), 1–15. Holtz-Eakin, D. and T. M. Selden (1995) “Stoking the fires. CO2 emissions and economic growth”, Journal of Public Economics, 57, 85–101. Hu H., N. Xie, D. Fang and X. Zhang (2018) “The role of renewable energy consumption and commercial services trade in carbon dioxide reduction: Evidence from 25 developing countries”, Appl. Energy 211, 1229 –1244. Jobert, T., F. Karanfil and A. Tykhonenko (2012) “The Environmental Kuznets Curve reconsidered from the perspective of heterogeneity: insights for climate change and energy policy”, GREDEG Working Paper Series: GREDEG WP No. 2012–15. Kais, S. and H. Sami (2016) “An econometric study of the impact of economic growth and energy use on carbon emissions: Panel data evidence from fifty eight countries”, Renew. Sust. Energ. Rev. 59, 1101 –1110. Kaufmann, D., A. Kraay and M. Mastruzzi (2010) “The Worldwide Governance Indicators: A Summary of Methodology, Data and Analytical Issues”, World Bank Policy Research Working Paper No.5430, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1682130. Keene, A. and S.C. Deller (2015) “Evidence of the Environmental Kuznets' Curve among US Counties and the Impact of Social Capital”, International Regional Science Review, 38 (4), 358–387. Kohler, M. (2013) “CO2 Emissions, Energy Consumption, Income and Foreign Trade: A South African Perspective”, Economic Research Southern Africa (ERSA) working paper 356. Mani, M. and D. Wheeler (1998) “In Search of Pollution Havens? Dirty Industry in the World Economy, 1960 to 1995”, The Journal of Environment Development, 7 (3), 215–247. Neumayer, E. (2002) “Do Democracies Exhibit Stronger International Environmental Commitment? A Cross-country Analysis”, Journal of Peace Research, 39 (2), 139–164. Nguyet Phan T., and K. Baird (2015), The comprehensiveness of environmental management systems: The infl uence of institutiona l pressures and the impact on environmental performance, Journal of Environmental Management 160, 45-56. North, D. (1990). Institutions, Institutional Change and Economic Performance. New York: Cambridge University Press. Oates, W. E. W. Baumol (1975) “The Instruments for Environmental Policy”, in Economic Analysis of Environmental Problems, ed. Edwin S. Mills, NBER, ISBN: 0-87014-267-4, 95–132. Oh, J. and C. Yun (2014) “Environmental Kuznets curve revisited with special reference to Eastern Europe and Central Asia”, International Area Studies Review, 17 (4), 359–374. Orubu, C.O. and D.G. Omotor (2011) “Environmental quality and economic growth: Searching for environmental Kuznets curves for air and water pollutants in Africa”, Energy Policy 39(7), 4178–4188. Rodrik, D., Subramanian, A., and Trebbi, F. (2004). "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development". Journal of Economic Growth, pp. 131-165. Roodman, D. (2009) “How to do xtabond2: An introduction to difference and system GMM in Stata”, The Stata Journal, 9 (1), 86–136. Saboori, B., J. Sulaiman and S. Mohd (2016) “Environmental Kuznets curve and energy consumption in Malaysia: A cointegration approach”, Energy Sources, Part B: Economics, Planning and Policy 11 (9), 861–867. Sarkodie, A. S. (2018) “The invisible hand and EKC hypothesis: what are the drivers of environmental degradation and pollution in Africa?”, Environ. Sci. Pollut. Res. 25, 21993 –22022. Sarzynski, A. (2012) “Bigger Is Not Always Better: A Comparative Analysis of Cities and their Air Pollution Impact”, Urban Stud, 49 (14), 3121-3138. Shahbaz, M., M. Mutascu and P. Azim (2013) “Environmental Kuznets curve in Romania and the role of energy consumption”, Renewable and Sustainable Energy Reviews 18, 165–173. Smulders, S., M. Toman and C. Withagen (2014) “Growth theory and 'green growth”, Oxf Rev Econ Policy, 30 (3), 423–446. Stern, D. I. (2004), “The Rise and Fall of the Environmental Kuznets Curve”, World Development 32(8), 1419–1439. Suri, V. and D. Chapman (1998) “Economic growth, trade and energy: implications for the environmental Kuznets curve”, Ecological Economics, 25(2), 195–208. Wang, S.S., D. Q. Zhou, P. Zhou and Q. W. Wang (2016), “The relationship between economic growth, energy consumption, and CO2 emissions: Empirical evidence from China”, Sci. Total Environ. 542, 360–371 (Part A). Zaman, K., M. A-el. Moemen (2017), “Energy consumption, carbon dioxide emissions and economic development: Evaluating alternative and plausible environmental hypothesis for sustainable growth”, Renewable and Sustainable Energy Reviews 74, 1119 –1130.