Testing for the existence of the Environmental Kuznets Curve (EKC) for CO 2 emissions in Ghana: evidence from the bootst
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RESEARCH ARTICLE
Testing for the existence of the Environmental Kuznets Curve (EKC) for CO2 emissions in Ghana: evidence from the bootstrap rolling window Granger causality test Michael Kaku Minlah 1 & Xibao Zhang 1 Received: 5 May 2020 / Accepted: 23 August 2020 # Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract This paper investigates the existence of the Environmental Kuznets Curve for carbon dioxide emissions in Ghana. The causal relationship between economic growth and carbon dioxide emissions being examined and the short-run and long-run parameters of the estimated vector autoregressive models are found to be unstable. This necessitated the use of a time-varying approach and the rolling window Granger causality test to investigate the causal relationship between economic growth and carbon dioxide emissions. We find that GDP has a positive effect on carbon dioxide emissions in the sample periods where GDP Granger causes carbon dioxide emissions. Significant feedbacks from the environment to the economy are observed, with carbon dioxide emissions having a positive effect on GDP in most of the subsample periods. The empirical results show that the Environmental Kuznets Curve for carbon dioxide emissions for Ghana is upward sloping, contrary to the standard Environmental Kuznets Curve theory which postulates an inverted “U”-shaped relationship between economic growth and environmental degradation. The implication of the result is that carbon dioxide emissions increase with increases in GDP. The study recommends that existing policies designed to ensure environmental sustainability and hence control carbon dioxide emissions need to be strengthened and enforced to ensure that the rapid urbanization and industrialization of the Ghanaian economy does not come at a cost to the quality of the environment Keywords Environmental Kuznets Curve (EKC) . Carbon dioxide emissions . Bootstrap rolling window Granger causality . Gross domestic product
Introduction Carbon dioxide, though a very small component of the atmosphere is such an important heat-trapping (greenhouse) gas, mostly released through anthropogenic causes such as deforestation and burning fossil fuels. Albeit, it is also released through natural causes such as respiration and volcanic eruptions. Since the beginning of the industrial revolution, human activities have exacerbated atmospheric CO2 concentration by
Responsible Editor: Philippe Garrigues * Michael Kaku Minlah [email protected] 1
more than a third, leading to the most important long-lived escalation of the menace of climate change1 2. The desire to achieve increased economic growth and thereby a better standard of living has not been without consequences on environmental quality. The environmental costs of economic growth have received considerable attention over the last few decades. This is due to the fact that there is the need to properly identify channels through which economic growth affects the environment and design policies to achieve environmentally frien
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