Effects of Economic Growth, Trade Openness, Deforestation and Agricultural Trade on African Environmental Quality (1960-2008): A 2SLS Approach

Anthony Onoja and A.I. Achike

No 161625, 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia from African Association of Agricultural Economists (AAAE)

Abstract: This study ascertained the effects of agricultural commercialization (agricultural net exports), deforestation as represented by exports of forestry products, economic growth and trade liberalization on the level of green house gas (CO2) emissions in Africa. It relied on World Bank data (economic development indicators) between 1960 and 2008. Two Stage Least Squares (2SLS) regression model (using logged variables) was applied in the study. Standard econometric diagnoses such as specification test, heteroscdasticity, autocorrelation and endogeneity tests were performed and their results validated the model’s use. All variables in the main equation were statistically significant and conformed to theoretical expectations. It was confirmed from our hypotheses tests that agricultural commercialization (p<0.03), forestry trade or deforestation (p<0.01), trade openness (p<0.01) as well as economic growth (p<0.01) all exerted significant influences on the level of CO2 emissions in Africa over the period in review. Surprisingly, urbanization, contrary to earlier researchers’ findings indicated a positive and significant influence on CO2 emission. Hence we recommended that Africa should begin to integrate policies that will reduce pollution especially (CO2 emission) in her drive for agricultural and economic growth. Environmentally efficient technologies that will build up less CO2 in African environment should be developed and adopted by farmers across the continent as they target the export markets; while regional efforts should be made to regulate trade and investment with the aim of reducing the adverse effects of trade activities such as deforestation and pollution of the environment.

Keywords: Community/Rural/Urban Development; Environmental Economics and Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 20
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaae13:161625

DOI: 10.22004/ag.econ.161625

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