Dynamic Heterogeneous Analysis of Pollution Reduction in SANEM Countries: Lessons from the Energy-Investment Interaction

Ekundayo Mesagan, Kazeem Ajide () and Xuan Vo ()
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Xuan Vo: University of Economics Ho Chi Minh City, Vietnam

No 21/101, Working Papers of the African Governance and Development Institute. from African Governance and Development Institute.

Abstract: This scientific enquiry examines the role of capital investment in the energy-pollution model in SANEM countries. The methodology is based on the Pooled Mean Group (PMG), which is appropriate for a heterogeneous panel. Findings reveal that energy use negatively impacts CO2 emissions in Algeria, South Africa, Morocco, and the panel, in the short-run; however, it positively impacts CO2pollution in Nigeria, Egypt, and the panel, in the long-run. Again, investment exerts a positive effect on CO2 in South Africa and Algeria, whereas it is negative in Nigeria, Egypt, and Morocco. Capital investment also expands short-run pollution in the panel, but it reduces long-run pollution. Lastly, the energy-investment interaction reduces the panel’s CO2pollution in the short-run and long-run, as well as, in Morocco, Egypt, Nigeria, and South Africa, except in Algeria. Thus, we conclude that capital investment is crucial in the energy-pollution nexus and suggest cooperation in attracting low-carbon emitting investments to the region.

Keywords: Capital Investment; Carbon Emissions; Energy Use; Energy Policy; Africa (search for similar items in EconPapers)
JEL-codes: F23 O55 Q32 Q48 Q53 (search for similar items in EconPapers)
Pages: 31
Date: 2021-01
New Economics Papers: this item is included in nep-ene, nep-env and nep-sea
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Forthcoming: Environmental Science and Pollution Research

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