What drives environmental degradation? Evidence from 14 Sub-Saharan African countries

Abstract

Although Sub-Saharan Africa (SSA) countries make less environmental pollution compared with other regions, the notably increasing economic growth and accelerating process of urbanization have resulted in the increase of energy needs and, thus, lead to environmental degradation. To empirically investigate the determinants of environmental degradation by accounting for the significant roles played by economic growth, non-renewable and renewable energy consumption, and urbanization, a balanced panel dataset of 14 SSA countries over 1990-2014 is utilized. Also, the ecological footprint (EF), considered a more comprehensive indicator, is used as a proxy of environmental degradation. The results confirm strong cross-sectional dependence within the SSA countries. The Augmented Mean Group (AMG) estimator indicates that economic growth, non-renewable energy consumption, and urbanization exert positive effects on the EF in the SSA countries, while renewable energy consumption plays a negative role in the EF. Moreover, bidirectional long-run causality runs among economic growth, non-renewable consumption, urbanization, and the EF; in contrast, unidirectional causality is found to run from renewable energy consumption to the EF. Therefore, for the SSA countries, the upgrading of industrial structure and further improvement of renewable energy are needed. In addition, urbanization plays a crucial role in contributing to environmental degradation and requires immediate policy response in the SSA countries.

Keywords: Cross-sectional dependence; Ecological footprint; Environmental degradation; Non-renewable and renewable energy consumption; Sub-Saharan Africa.