CARBON EMISSIONS AND INTERNATIONAL TRADE IN SUB-SAHARAN AFRICA: A DYNAMIC PANEL THRESHOLD ANALYSIS

Abstract

Climate change has been linked to cross-boarder trade where carbon emissions constituted a major source of environmental degradation. This study focused on carbon emssions and international trade in sub-Saharan Africa. A dynamic panel threshold model of carbon emissions (CO2 ) and international trade was estimated. The result indicate the existence of threshold in CO2 emissions for total trade, export and import in sub-Saharan Africa. The average estimated threshold in million metric tons of CO2 emissions is 2455.29. Our result suggest that this is the emissions benchmark above which CO2 emissions will negatively be correlated with international trade in our sample. Our finding equally support that sub-Saharan Africa’s trade are CO2 emission-laden notwithstanding the prevailing regime. The CO2 emission threshold of import is less than that of total trade and export. This suggests that subSaharan African countries export more CO2 emissions than they import. Thus, there is no evidence in support of Pollution Haven Hypothesis in sub-Saharan Africa based on our findings. We recommend that as sub-Saharan Africa strive to achieve export-led growth through expansion of its export, there is need to concentrate on green trade in order to be competitive in the international market and avoid being caught up with environmental restrictions on trade. Subsaharan African countries should learn from the experiences of industrialized world and intensify utilization of clean energy for growth and expansion. We equally recommend a balance in the global implementation of climate policies in order not to harm African economies’ quest for industrialization.