ANALYSIS OF THE CAUSAL RELATIONSHIP BETWEEN ECONOMIC GROWTH AND ENVIRONMENTAL DEGRADATION IN WEST AFRICA

Abstract

As climate change continues to cause more concern the world over, analyzing the causal relationship between economic growth and carbon dioxide emissions is paramount in West African sub-region that has been the hardest hit by the menace. This study investigated the causal relationship between economic growth and carbon emissions in West African countries using panel data spanning over 1970 to 2019 and employing the Dumitrescu-Hurlin (2012) panel causality test. After establishing the order of integration of the study’s variables and cointegration, the results indicated that economic growth causes carbon emissions in the studied countries without feedback. But trade openness has a bi-directional causal relationship with carbon emission. Foreign direct investment (FDI) and financial development exhibit a unidirectional causal relationship with emissions and the causality runs from FDI and financial development to carbon emissions. However, in the case of population, the unidirectional causality runs from carbon emissions to population. The policy suggestion is that ECOWAS countries should promote conservation policies to curtail pollution while stressing the inflow of green FDI into the region.