Remittance and carbon dioxide emissions in the Southern African Customs Union region: Is there a modified environmental Kuznets curve?

Abstract

The remittance-carbon dioxide ($C{O}_2$) emissions nexus remains a hotly debated topic in the literature, with the majority of studies offering mixed conclusions. This study attempts to reconcile these disparities by investigating the nonlinear effect of remittances on the $C{O}_2$ emissions in top-remittance receiving countries in Southern African Customs Union (SACU) region, using the modified Environmental Kuznets Curve framework which focuses on the effect that remittances might have on $C{O}_2$emissions. The Cross-Sectional Autoregressive Distributed Lag (CS-ADRL) approach is applied to these top-remittance receiving countries from 1990 to 2020, representing a pioneering investigation for these countries. The finding of this study reveal that both the estimated coefficient of remittances and its quadratic term are statistically significant, with remittances displaying a positive coefficient and the quadratic term exhibiting a negative coefficient. This pattern confirms the presence of a modified EKC hypothesis, meaning as remittances increases, $C{O}_2$ levels displays an unambiguous inverted U-shaped trajectory.