International trade and environmental pollution in sub-Saharan Africa: do exports and imports matter?

Abstract

Sub-Saharan Africa (SSA) and Africa in general are known as the lowest emitters of carbon dioxide (CO2) emissions. However, CO2 emissions in SSA are increasing, making it a problem of concern and calls for attention given its adverse consequences on human health and climate change. International trade is argued to have a vital role in global and SSA emissions in diverse ways, leading to doubts of whether trade is good or bad to the environment. As a result, we explore the environmental effect of international trade in 33 SSA countries from 1990 to 2020. The study further evaluates the differential effect of exports and imports on environmental pollution. The generalized method of moment estimator and Dumitrescu and Hurlin (D-H) causality test were utilized. The results revealed that the overall effect of trade reduces environmental pollution by about 0.10% and 0.79% in both the short and long run, respectively. Again, we observe that exports and imports minimize environmental pollution of about 0.07% and 0.45% (0.08% and 0.58%) in the short run (long run), respectively. Regarding D-H results, we noticed the existence of bidirectional causality between total trade and environmental pollution, whereas exports and imports have a unidirectional causality from CO2 emissions to exports and imports. We conclude based on the findings that international trade causes pollution reduction in SSA. Furthermore, we establish that exports and imports have a homogeneous impact on environmental pollution in SSA. Given the results, we call for trade initiatives that ensure improvement in environmental and energy efficiency technologies related to production and transportation of exported and imported goods and services.