Persistence and trends in CO₂ emissions in Africa: is Chinese FDI behind these features?

ABSTRACT

In this article, we investigate the statistical features of the CO₂ emissions and CO₂ emissions per capita in a group of 45 African countries by looking at their degree of persistence and also testing for the existence of trends in the data. In addition, we also investigate if this level of emissions is related to the Chinese FDI in Africa. The results are very heterogeneous across countries, observing orders of integration statistically below 1 in a group of countries; in others, the majority of them, the values are around 1, while for some others, the degree of integration is statistically significantly above 1. Linear time trends are observed in approximately half of the countries. These results imply that, in the long term, public measures to reduce CO₂ emissions may be required in the majority of the countries since in the event of shocks the series will not return by themselves to their original levels. If we look at Chinese FDI in these countries, we observe that there seems to be no relationship between the Chinese investment in Africa and the CO₂ emission persistence, though this result needs to be contrasted in future research.

KEYWORDS:

• CO₂ emissions
• Africa
• China
• FDI
• persistence

JEL CLASSIFICATION:

• C25
• F64
• F21

Acknowledgment

Prof. Luis A. Gil-Alana gratefully acknowledges financial support from the project from ‘Ministerio de Economía, Industria y Competitividad’ (MINEIC), `Agencia Estatal de Investigación’ (AEI) Spain and `Fondo Europeo de Desarrollo Regional’ (FEDER), Grant PID2020-113691RB-I00 funded by MCIN/AEI/10.13039/501100011033. He also acknowledges support from an internal Project of the Universidad Francisco de Vitoria. Comments from the Editor and two anonymous reviewers are gratefully acknowledged.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Research finds that sometimes low-income countries engage in a “race to the bottom” using lax environmental regulations to compete in the FDI arena (due to their lack of infrastructure and skills), while other unintended pollution havens may arise just because low-income countries are less able to implement and monitor environmental regulations.

2 See Gil-Alana (2004) for the convenience of the model of Bloomfield (1973) for autocorrelation in the context of fractional integration.

3 Carbon dioxide emissions include carbon dioxide produced during consumption of solid, liquid, and gas fuels and gas flaring, and they are those stemming from the burning of fossil fuels and the manufacture of cement.

Additional information

Funding

The work was supported by the European Regional Development Fund []; Ministerio de Economía, Industria y Competitividad, Gobierno de España [ECO2017-85503-R]; Agencia Estatal de Investigación []; Universidad Francisco de Vitoria, Madrid, España []