Modelling the impacts of climate change on cereal crop production in East Africa: evidence from heterogeneous panel cointegration analysis

Climate change has become an issue of concern for sustainable agriculture production. East African nations are heavily reliant on the agriculture sector, which accounts for a substantial amount of their gross domestic product (GDP) and employment. Due to climatic fluctuations, the output of the sector became very unpredictable. Hence, this study investigates the effects of climate change on cereal crop production in nine East African nations between 1990 and 2018. The study implemented pooled mean group (PMG) approach to examine the long-run and short-run dynamic impacts of the varying climatic circumstances on the output of cereal crops. The results reveal that rainfall and carbon emissions have favourable and significant long-run effects on cereal crop output, even though their short-run impacts are negligible. Additionally, cultivated land area and rural population have a constructive role in enhancing agricultural output both in the long-run and short-run. However, average temperatures have negative repercussions on cereal crop production in the long-run and short-run, even though the magnitude of sensitivity is greater in the short-run. Dynamic ordinary least squares (DOLS) and fully modified ordinary least squares (FMOLS) validated the robustness of the long-run findings of the PMG technique. Besides, the Dumitrescu-Hurlin panel causality outcomes indicate that cereal crop output has a bidirectional causality with temperature, carbon emissions, and cropped area. The study further demonstrated unidirectional causation from rural population to cereal crop yield. The study recommends that East African policymakers improve the quality of farm inputs, the adoption of climate-resilient farming practices, the development of water retention facilities and the establishment of crop diversification initiatives.

The impact of population factors and low-carbon innovation on carbon dioxide emissions: a Chinese city perspective

Carbon dioxide (CO₂) emission reduction has become an important concern worldwide. During the past century, human activities have been a significant cause of the increase in the level of greenhouse gases. Past research mainly focuses on evaluating the nexus between unidimensional population factors and CO₂ emissions, while few prior studies in a developing country have reported the impact of multidimensional demographic factors on CO₂ emissions. As an initial attempt, this study investigates the short- and long-run associations between population factors, low-carbon innovation, and carbon dioxide emissions (CO₂) for a panel consisting of 285 cities by employing the pooled mean group (PMG) estimator under the framework of the panel autoregressive distributed lag (ARDL) model. Our main findings are as follows: (1) Population size and population density could increase CO₂ emissions, while population quality and low-carbon innovation were essential factors that alleviate carbon emission pressure in the long run. (2) Economic development, foreign direct investment, and industrial development were found to be factors causing the increase in carbon emissions. (3) The split-sample analysis demonstrated that the improvement of population quality still has a positive and significant long-run effect on environmental quality. Simultaneously, low-carbon innovation could realize the enormous dividends of carbon emission reduction in the long run, especially in existing relatively larger CO₂ emission areas. Finally, the paper presents important policy implications.

ICT, renewable energy, financial development, and CO2 emissions in developing countries of East and South Asia

This study aims to analyze the impact of ICT, renewable energy consumption, and financial development on CO₂ emissions in selected developing countries of East and South Asia. Using panel data spanning 1985-2020, Pooled Mean Group (PMG) estimator is used to analyze the short-run and long-run effects. Results suggest that ICT and financial development positively contribute to the degradation of the environment in the long run, while their impact on CO₂ emissions is insignificant in the short run. On the other hand, renewable energy consumption affects environmental quality positively in both the long run and short run. It is also examined that economic growth affects CO₂ emissions positively but the squared economic growth reduces CO₂ emissions which validates inverted U-shaped EKC hypothesis. The empirical findings of the Granger Causality test suggest unidirectional causality from ICT and financial development to CO₂ emissions, while a bi-directional relationship is found among renewable energy and CO₂ emissions. Results imply that governments in these countries need to invest in renewable energy to control environmental degradation.

Environmental impacts of FDI: evidence from heterogeneous panel methods

This paper investigates the effect of foreign direct investment (FDI) on environmental quality for 123 nations over the period 1996 to 2018. The study also conducts a comparative analysis for 45 developing and 78 developed nations to better understand the environmental impacts of foreign direct investment. The study employs pooled mean group (PMG) and mean group (MG) estimation techniques for investigating the impacts of FDI on environmental quality as the slope heterogeneity test rejects the null hypothesis of homogenous slope coefficients for the cross-sectional units in all country groupings. In addition, the study employs common correlated effect pooled mean group (CCEPMG) and common correlated effect mean group (CCEMG) estimation methods to tackle cross-sectional dependence in all country groupings. The results indicate that the impact of FDI on environmental emission is negative and significant for the global sample. Furthermore, the comparative analysis for developed and developing countries indicates that FDI improves environmental quality in developed nations as it leads to a lower level of CO₂ emissions whereas it leads to adverse environmental impacts in the developing nations as it leads to a higher level of CO₂ emissions. The empirical findings for developed and developing countries confirm pollution haven hypothesis (PHH) for developing countries while pollution halo hypothesis for developed countries. This study may help the policy makers to better understand the attributes of FDI and to devise such type of policies and regulatory framework which encourages environmentally friendly FDI or the FDI that take care of environmental quality.

Financial development and carbon emissions in Sub-Saharan Africa

This study analyzed the nexus between financial development (FD, and its key dimensions), economic growth, and carbon dioxide (CO₂) emissions for 37 Sub-Saharan African (SSA) countries from 2000 to 2016. The data sources include the world development indicators, the IMF financial development, and the Maddison Project databases. The empirical strategy involved checking for cross-sectional dependence, causality, and regressions analysis using second-generation analytical techniques. The regression analysis technique was the pooled mean group ARDL estimator. The dynamic generalized method of moment estimator was used to provide robustness checks. The findings indicate that overall FD reduces CO₂ emissions in the region and supports the environmental Kuznets curve (EKC) hypothesis. Specifically, the results reveal that a 1 unit increase in the overall FD index results in a 2.867% reduction in CO₂ emissions over the long run. The coefficient of the speed of adjustment is found to be approximately negative 41% and statistically significant, which suggests that approximately 41% disequilibrium in carbon emissions is adjusted back to long-run equilibrium within a year. The Granger causality test indicates a bi-directional causality between FD and CO₂ emissions. Additional research of the critical financial subsectors for low-carbon growth suggests that the financial market index, including its access and efficiency dimensions, has a considerable CO₂ emission reduction effect. On the other hand, the financial institution index has no discernible effect, even though its access and depth dimensions contribute to CO₂ emission reductions.

The impact of energy consumption on environmental quality: empirical evidence from the MINT countries

Rapid increases in energy consumption and economic growth over the past three decades are considered the driving force behind rising environmental degradation, which remain a threat to people and healthy environment. This study investigates the impact of energy consumption on environmental quality in the MINT countries using a panel PMG/ARDL modelling technique, and the Granger causality test spanning from 1971 to 2017. The empirical results confirm the existence of long-run nexus among the variables employed. The results also reveal that economic growth, energy consumption and bio-capacity have a positive and statistically significant effect on environmental degradation during the long run period. We find that a 1% increase in primary energy consumption leads to 0.4172% increase in environmental deterioration in the long-run period, but it is insignificant in the short run. This implies that energy consumption deteriorates environmental quality through a negative effect of ecological footprint. The result also suggests that as MINT countries increase the use of energy to accelerate pace of economic growth, environmental quality would deteriorate through increased ecological footprints. The coefficient of the error correction term (ect) is negative and significant (- 0.2306), suggesting that ecological footprint, a measure of environmental degradation would converge to its long-run equilibrium in the MINT region by 23.06% speed of adjustment every year due to contribution of economic growth, energy consumption, urbanization and biocapacity. The Granger non-causality test results reveal a unidirectional causal relationship from economic growth, energy consumption, and urbanization to ecological footprint and from economic growth to biocapacity. The results further show bi-directional causality between biocapacity and ecological footprint as well as between biocapacity and economic growth. Moreover, urbanization causes economic growth and biocapacity Granger-causes urbanization. Based on these findings, policy implications are adequately discussed.

Does ecological footprint matter for the shape of the environmental Kuznets curve? Evidence from European countries

The study empirically examines the environmental Kuznets curve (EKC) hypotheses by investigating the relationship between ecological footprint, economic growth, energy consumption, and population growth. The study uses ecological footprint as a measurement of environmental degradation which is a more comprehensive indicator and considers all factors responsible for environmental degradation. Keeping in view the problem of cross-sectional dependence, a more efficient estimation tools like pooled mean group and augmented mean group have been used to estimate the long-run parameters for 22 European countries from 1995 through 2015. Results of the study found a quadratic relationship between income growth and ecological footprint and support validity of EKC. Energy consumption positively contributes to ecological footprint, while population growth plays no significant role in determining environmental quality. The long-run estimates of the study are validated through robustness analysis by employing dynamic ordinary least square (DOLS) and fully modified ordinary least square (FMOLS) techniques. Dumitrescu and Hurlin (2012) panel non-causality test indicated that there is a unidirectional causality running from GDP to ecological footprint while bidirectional causality running between energy consumption and ecological footprint. The study identified that population growth in European region is not a severe issue as compared to intensive energy consumption. Policies which restrict emission, deforestation, and water pollution should be adopted for sustainability of environment.

Agriculture and environmental degradation in Africa: The role of income

The interconnectivity between environmental degradation, poverty and agriculture is an issue of great concern, especially in developing countries. This paper studies the effect of agriculture on the environment, conditional upon the level of income in a panel of eleven Central and West African countries for the period 1996 to 2015, using Pooled Mean Group (PMG), Mean Group (MG) and Augmented Mean Group (AMG) techniques. Our findings indicate that individually, income and agriculture aggravate environmental degradation. The interaction effect confirms that rising income levels dampen the negative impact of agriculture on the environment. Also, while increased use of renewable energy and improved regulations lower environmental degradation, population growth does more damage to the environment. This study concludes that unsustainable agricultural practices degrade the environment and poverty alleviation can mitigate the effect. To solve the problem of environmental degradation, poverty must be addressed and income levels must be raised in an ecofriendly manner.