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Does economic integration damage or benefit the environment? Africa's experience

Awad, Atif
Energy policy 2019 v.132 pp. 991-999
carbon dioxide, data collection, empirical research, energy, environmental Kuznets curve, environmental quality, free trade, pollutants, poverty, sustainable development, Africa
The leaders of African nations have committed to the establishment of the Continental Free Trade Area (CFTA) over the coming years. Improved links among the African nations, via increased intra-regional trade, have been considered as an essential mechanism to produce desired growth run-overs and to support regional economic improvement. However, remarkable theoretical and empirical evidence has shown that increased trade might damage the environment and therefore may hinder the effort towards sustainable development and poverty reduction on the continent. The present paper seeks to investigate and test the impact of intra-Africa trade using two measurements of environmental pollutants, namely CO2 and MP10 whilst integrating economic growth, and energy consumption. The study used a panel dataset regarding 46 African countries over the period 1990–2017. To carry out the empirical analysis, the latest panel estimation techniques were employed. More specifically, and for the urbaneness purpose, we employed a parametric technique, which is dynamic OLS, and a non-parametric approach which is FMOLS. The results of both methods suggested that intra-Africa trade improved environmental quality on the continent. In addition, the results confirmed the presence of the Environmental Kuznets Curve (EKC) hypothesis. The findings also indicated that whilst the consumption of energy played a vital role in the deterioration of the environment, its impact remained marginal. Overall the results implied that intra-regional trade and the environment quality were mutually supportive in Africa.