Impact of Economic Diversification on Environmental Degradation in Resource-Rich Economies: A Case of Namibia

Brigitte Fikunawa ()
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Brigitte Fikunawa: Nelson Mandela University, Department of Economics

Chapter Chapter 1 in Proceedings of the Global Conference on Economic Diversification 2024, 2026, pp 1-20 from Springer

Abstract: Abstract As Namibia is advocating for economic diversification and increased economic activities, it involves greater use of energy, which impacts the environment. Hence the study aims to examine the impact of economic diversification on environmental degradation. The study employed the ARDL bound test approach using data from 1990 to 20,021. The study used Tress and Ogive indices are proxies of economic diversification while carbon dioxide emissions represent environmental degradation. The study suggests that there is a positive and statistically significant long-run relationship between economic diversification and greenhouse environmental degradation. In the short run, the relationship is inverted U-shaped, as diversification increases environmental degradation and reduces it after a certain period. Trade, GDP, and FDI significantly increase environmental degradation while population growth reduces environmental degradation. For Namibia to keep its commitment to sustainable development, the country needs to continue advocating environmental protection through clean production and the establishment of green industries and energy sources. In addition, there is a need to establish and implement regulatory frameworks that disincentivise industries that emit high CO2 and those that do not commit to sustainable production in the form of taxes.

Keywords: CO2; Economic diversification; Trade openness; Per capita GDP; Population growth; Environmental degradation (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-981-95-2022-0_1

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DOI: 10.1007/978-981-95-2022-0_1

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