The Impact Of Economic Growth,Energy Consumption And Foreign Direct Investment And Population Growth On The Environment Of Sub-Saharan Africa

The epoch of international global economic-development has led to several factors which have affected mankind and his surroundings?environment?in the whole world and Sub Saharan Africa in particular.The intensification of economic development has called for a huge consumption of energy which has triggered an increase in the emanation of carbon emissions globally.Dimensions of the harming greenhouse gas?CO₂?have arrived at an alarming and disconcerting milestone which has increased global temperature.Therefore,The Paris Climate treaty was signed by responsible nations in 2015 to reduce the increase of global temperature to1.5°C and on the other hand,it was also indicated that if the temperature increases to 2°C the world will be in a devastated situation if nothing is done about it.This will pave way for the world to start experiencing challenges like heat wave,wildfire,reduction in water bodies,increase in drought expansion and diseases like cancer,asthma,gastrointestinal,immunological,cardiovascular and neurological damage.This challenge of environmental pollution also prompted other International bodies like United Nations Framework Convention on Climate Change?UNFCCC?;World Health Organization,International Energy Agency,Intergovernmental Panel on Climate Change?IPCC?,United Nations Environment Programme?UNEP?and World Commission on Environment and Development to work tirelessly to mitigate carbon emissions and limit temperature increase to1.5°C.Based on the research done by several researchers,it's indicated that more attention has been put on developed nations which left developing economies to lug behind in terms of carbon emissions mitigation.Therefore,this study examines the impact of economic growth,energy consumption,foreign direct investments and population growth on the environment of Sub Saharan Africa and countries considered for the study are 11 which includes Congo Democratic Republic,Cameroon,Ghana,Kenya,Mauritius,Nigeria,Senegal,South Africa,Togo,Uganda and Zimbabwe for the period of 1970 to 2017.The major reason for the selection of these eleven sub Saharan Africa countries was because most of the sub Saharan African countries lacked data that would help to carry out a broader research on sub Saharan African countries.Sub Saharan Africa is developing gradually from the past economic depression,South Africa and Nigeria being the good example as the rest of Sub Saharan African countries follow gradually in terms of economic development.This study is important in the sense that it provides policy regulations and recommendation for Sub Saharan Africa and the world at large for the mitigation of carbon emissions.It also adds more literature upon the already existing studies for the good of the environment.This study seeks to achieve four objectives as follows:?1?To test the presence of short and long run cointegration among economic growth,energy consumption,foreign direct investment,population growth and CO2 in Sub Saharan Africa;?2?To investigate the validity of Environmental Kuznets Curve theory among the variables of this study;?3?To examine the direction of granger causality among economic growth,energy consumption,foreign direct investment,population growth and environmental pollution;?4?To analyze the future effect of economic growth,energy consumption,foreign direct investment,population growth on the environment.To achieve these four objectives,the study applied panel data series obtained from World Bank Indicators?http://data.worldbank.org/indicator?running from 1970 to 2017 and International Energy Statistics?Uganda?2014 for the period 1970 to 2014.Economic growth measured by GDP per capita?current US$?,Energy consumption measured by fossil fuel energy consumption and foreign direct investment measured by FDI inflow?current US$?and population measured by population growth to achieve the aim and the objectives of our study.For the investigation of the study,the study applied Cross-sectional Dependence Test of Pesaran?2004?;Unit Root Test including ADF,PP;the Autoregressive Distributed Lag-Pooled Mean Group?ARDL-PMG?model;Fully Modified Ordinary Least Square?FMOLS?;Dynamic-OLS?DOLS?,Granger Causality and Bayesian Vector Autoregressive?B-VAR?methodologies geared towards the objective of this paper.This study tested for the presence of Panel cointegration in economic growth,energy consumption,foreign direct investment and environmental pollution the following PP and ADF test.The findings also report that null hypothesis of no cointegration is not rejected by each and every unweighted panel statistic at within-dimension,panel v-statistic at weighted and the rho-Statistic at between-dimension of which the null is rejected inferencing that at least on or all the cross terms are cointegrated.Based on the Kao panel cointegration it is found that variables are cointegrated and they have cointegration relationship for the elective speculation of cointegration is at 1%level.Both the Pedroni and Kao panel cointegration tests have the same results.To achieve the first objective,the study used ARDL-PMG estimation to investigate the presence of short run and long run cointegration in economic growth,energy consumption and foreign direct investment and environmental pollution in sub-Saharan Africa.The study used ARDL-PMG estimation to take the cointegration form of ARDL methodology and use it for a panel arrangement to allow the intercepts,short and long run coefficients and the terms of cointegration to have a divergence among the cross sectional effects.The findings indicate the resistance of carbon emissions as the dependent variable on the economic growth,energy consumption and FDI and population growth as the independent variables.This means that carbon emission is a big challenge which cannot be eliminated without investing in friendly technology.Unlike population which is significant at 1%level,the rest of the variables are not statistically significant.The coefficient of energy consumption is negative and those of population are positive.Thus,when population increases,carbon emissions increases by 0.011%.While energy consumption increase,carbon emissions decreased by 0.001%.According to the findings,as energy consumption increases,it is capable of reducing carbon emissions when green energy is emphasized.Sub Saharan Africa therefore has to encourage more essential environmental policies and regulations to enhance sustainable economic enhancement.The short run estimation results indicate that gross domestic product is the only significant and positive so that carbon emissions are increased by 0.004%by 1%increase in GDP.The results also reported that the long run equilibrium is significant and negative at 1%level so that carbon emissions returns to equilibrium at a rate of 0.002%.To achieve the second objectives,the study tested for validity of Environmental Kuznets curve test.The results indicated that the coefficients of economic growth?GDP?and economic growth squared?GDP²?are statistically significant by the use of DOLS and FMOLS,though with the confounding signs.Based on the DOLS methodology,the coefficient of GDP is negative while the one of GDP² is positive with a clear evidence of a U-shaped curve.This means that EKC does not exist in these countries.Instead the study achieved a more genuine assessment of the effect of GDP and its effect on the transformation in technology on the environment.Based on the analysis of this study,it looks like the variables which measure environmental pollution are most likely to be monotonically increasing GDP by the income elasticity.As the income increases there is reduction in carbon emissions in the countries chosen for this study.However,those by ARDL-PMG are insignificant confirming to the fact that EKC is sensitive to the kind of methodologies used.As the nation's income starts to increase,the starts to experience structural transformation or change in the economy which is a great tool for the reduction of carbon emissions as they adopt new and latest green technologies since there is absence of Environmental Kuznets curve in the selected countries.To achieve the third objective,the study investigated the direction of granger causality test among the variables.The study discovered the existences of unidirectional bidirectional causality among the variables.The findings showed that GDP granger cause CO₂,EC granger cause CO₂,CO₂ granger cause EC,CO₂ granger cause PG,GDP granger cause FDI,GDP granger cause PG,EC granger cause PG,FDI granger cause FDI at 1%level of significance.Additionally,there is also unidirectional causality flowing from PG to CO₂,GDP to EC,at 5%level significance and finally from FDI to GDP and from FDI to PG at 10%level.On the side of bidirectional granger causality,energy consumption and carbon emissions granger causes each other.Similarly,population growth evidently granger cause carbon pollution,and so does carbon emissions to population.The bidirectional causality between foreign direct investments and economic growth is very important.Population growth and foreign direct investments also seem to granger cause each other.The rest of the causalities are insignificant for example from carbon emissions to GDP,FDI and economic growth among others.It's evidenced that urban population growth and fossil energy consumption are the major carbon emitter among the variables selected for this study.To achieve the fourth objective,the study analyzed the future effect of economic growth,energy consumption,FDI and population growth on the environment.The study revealed that carbon emission is more like to keep on increasing after every 5 years.This was arrived at when the study used impulse response function and variance decomposition approach to predict the future of carbon emissions in Sub Saharan Africa.From the prediction,there will be continuous carbon emissions increase as economic development takes place.This will strongly call upon the attention of governments to shift from nonrenewable energy to renewable energy to rescue the environment from being degraded by the economic activities.It was found that as carbon emissions increases,the policy recommended is that Sub Saharan Africa should implement policies toward eco energy utilization for example wind energy,solar energy,and biofuel to enhance economic growth.In the long run for Sub Saharan Africa should emphasize the increase of renewable sources in the energy source mix for its accessibility for economic development.Government organizations should work together to stand against environmental pollution in sub Saharan and the world at large.The main innovations of the study:First and foremost,although most studies have tried to investigate the factors responsible for environmental pollution,this study is vital in the sense that it is contributes a lot to the existing literature dealing with the same challenges caused by the selected variables of the study.Secondly,the study also used second generation econometric methodologies to test hypotheses to provide vital policies and also to encourage transformation of economic growth,energy consumption,and foreign direct investment in sub Saharan Africa for sustainable economic development through statistical interpretations.Thirdly,the study used ARDL-PMG and CD estimation to take the cointegration form of ARDL methodology and use it for a panel arrangement to allow the intercepts,short and long run coefficients and the terms of cointegration to have a divergence among the cross sectional effects or correlation.Fourthly,carbon emissions have become a huge problem.There is a need to understand how the future of the environment of sub Saharan Africa will be.Therefore,this study provides the prediction of the air quality after a period of five years.