Year: 2025
Type: article
Abstract: In the context of 47 African States, we investigated the distinguishing effect of the goods and services trade in generating pollution from 2000 to 2022. The study relied on two prominent panel data estimation techniques, random effect and system GMM. Findings show that positive scale and negative technique effects exist in the African continent, and this affirms the environmental Kuznets hypothesis. A rise in foreign trade as disaggregated into goods and services trade, increases CO 2 emissions, while we failed to reject the hypothesis that “goods trade is more polluting in terms of generating CO 2 emissions than services trade”. We observed a nonlinear link between goods trade and CO 2 emission in the general sample of African countries and the sub-sample of resource-rich African countries, while in the case of services trade and CO 2 emission nexus, a non-linear link is only observed in the sub-sample of resource-poor African countries. The observed threshold of goods trade in the general sample is 6.06, which is yet to be attained, and the 4.46 threshold in the resource-rich countries, which has been attained. The threshold of services trade is 5.56 in the resource-poor countries. This threshold has been attained by resource-poor countries. Other pollutants (GHG, PM 2.5 , N 2 O, and F-gases) all show a non-linear link with services trade with thresholds of 10.25, 3.13, 159453368.8, and 859.85. Goods trade-GHG and goods trade-F-gases show an inverted U-shaped threshold of 2,568,702,300 and 136.87, and a U-shaped threshold of 29.36 with N 2 O emissions. The premise that trade openness changes the industrial composition toward polluting sectors was validated in most cases. From our estimate using CO 2 emissions, energy held the second dominant role in exacerbating pollution. In the general sample and sub-sample, we reject the hypothesis that trade may bring the right energy-efficient technology that lowers pollution. When other pollutants are used, we have established, to some extent, evidence of this hypothesis. In the case of CO 2 , our findings also validate the pollution haven and the factor abundance effect of both goods and services trade. When other pollutants are used, a pollution haven in services trade exists in the case of PM 2.5 and F-gases, and PM 2.5 and N 2 O for goods trade. In the case of CO 2 emissions, although trade is polluting, the use of trade to transfer pollution from the developed world to African countries is even more polluting. The study recommends the need to implement environmental regulations and policies to curb pollution transfer to the African continent.
Source: Discover Sustainability
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $1,390
OpenAlex ID: W4415789461