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Does economic integration damage or benefit the environment? Africa's experience

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  • Awad, Atif

Abstract

The leaders of African nations have committed to the establishment of the Continental Free Trade Area (CFTA) over the coming years. Improved links among the African nations, via increased intra-regional trade, have been considered as an essential mechanism to produce desired growth run-overs and to support regional economic improvement. However, remarkable theoretical and empirical evidence has shown that increased trade might damage the environment and therefore may hinder the effort towards sustainable development and poverty reduction on the continent. The present paper seeks to investigate and test the impact of intra-Africa trade using two measurements of environmental pollutants, namely CO2 and MP10 whilst integrating economic growth, and energy consumption. The study used a panel dataset regarding 46 African countries over the period 1990–2017. To carry out the empirical analysis, the latest panel estimation techniques were employed. More specifically, and for the urbaneness purpose, we employed a parametric technique, which is dynamic OLS, and a non-parametric approach which is FMOLS. The results of both methods suggested that intra-Africa trade improved environmental quality on the continent. In addition, the results confirmed the presence of the Environmental Kuznets Curve (EKC) hypothesis. The findings also indicated that whilst the consumption of energy played a vital role in the deterioration of the environment, its impact remained marginal. Overall the results implied that intra-regional trade and the environment quality were mutually supportive in Africa.

Suggested Citation

  • Awad, Atif, 2019. "Does economic integration damage or benefit the environment? Africa's experience," Energy Policy, Elsevier, vol. 132(C), pages 991-999.
    • Handle: RePEc:eee:enepol:v:132:y:2019:i:c:p:991-999
    DOI: 10.1016/j.enpol.2019.06.072
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    2. Atif Awad, 2021. "Structural Transformation versus Environmental Quality: The Experience of the Low-income Countries in Sub Saharan Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 11(6), pages 479-488.
    3. Kollie, Genesis B., 2020. "Export-Led Growth Hypothesis in ECOWAS: A Panel Data Analysis," African Journal of Economic Review, African Journal of Economic Review, vol. 8(2), July.
    4. Alper Yılmaz, 2023. "Carbon emissions effect of trade openness and energy consumption in Sub-Saharan Africa," SN Business & Economics, Springer, vol. 3(2), pages 1-28, February.
    5. A. Désiré Adom, 2021. "An Investigation into the Nexus Between Human Development and Carbon Dioxide Emissions: A Global Panel Analysis," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 7(4), pages 155-162, 12-2021.
    6. Xiang Zhang & Xuhui Long & Zongyi Zhang & Chenyang Yu & Rong Huang, 2023. "Assessing the Impact of a Regional Integration Policy on Corporate Environmental Performance: Micro-Evidence from Chinese Industrial Firms," Sustainability, MDPI, vol. 15(16), pages 1-17, August.
    7. Kazem Biabany Khameneh & Reza Najarzadeh & Hassan Dargahi & Lotfali Agheli, 2021. "The Role of Global Value Chains in Carbon Intensity Convergence: A Spatial Econometrics Approach," Papers 2111.00566, arXiv.org.

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    More about this item

    Keywords

    Economic integration; Environment; Trade; Africa; Free trade area;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F10 - International Economics - - Trade - - - General
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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