The Effect of Economic Growth on Carbon Dioxide Emissions in Sub-Saharan Africa: Decomposition into Scale, Composition and Technique Effects

Abstract

The objective of this paper is to decompose the effects of economic growth on carbon emissions into scale, composition and technique effects in a panel of 23 Sub-Saharan African countries between 1996 and 2014. We combine static and dynamic panel estimation technique to quantile regression technique in order to bring out a detailed description of the relationship between carbon emissions and its determinants at different levels of carbon dioxide emissions. The results from static and dynamic estimations reveal that the expansion in the scale and the composition of the economy increase carbon emissions, while improvements in the technology are sufficient to reduce carbon emissions. However, quantile regressions indicate that these three effects are heterogeneously distributed across the dioxide carbon emission levels, and the scale effect holds only at the lower quantiles. The results also indicate that financial development, the size of population and the exports (as a percentage of GDP) have a positive effect on carbon emission, while imports (as a percentage of Gross Domestic Product) reduce it.