The nexus between crude oil price shocks and environmental quality: empirical evidence from sub-Saharan Africa

Elvis Achuo

SN Business & Economics, 2022, vol. 2, issue 7, 1-15

Abstract: Abstract The quest for sustainable development has exacerbated the rate of global greenhouse gas emissions resulting from the increased consumption of non-renewable energy. The growing importance of the oil industry as a major driver of economic development has aroused research interest on the environmental impacts emanating from the exploration, production, transportation and consumption of oil products. Thus, this study empirically examines the nexus between crude oil price shocks and environmental quality in sub-Saharan Africa (SSA). With the help of the Pooled Mean Group Autoregressive Distributed Lag (PMG/ARDL) estimation technique, a significant positive long-run relation is found among crude oil price and carbon dioxide (CO2) emissions. This implies that upsurges in crude oil price deteriorate environmental quality in the context of SSA. Moreover, the results show evidence of a significant positive effect of real Gross Domestic Product (GDP) on CO2 emissions in SSA, indicating that environmental degradation worsens as SSA countries attain higher levels of economic growth. Consequently, there is need for policymakers in SSA counties to encourage investments in green technologies as well as encourage the consumption of renewable energy which is believed to be environment-friendly.

Keywords: Crude oil price; CO2 emissions; Environmental quality; Sub-Saharan Africa (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s43546-022-00264-9

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