Carbon decoupling and economic growth in Africa: Evidence from production and consumption-based carbon emissions

This study examines the issue of decoupling between economic growth and carbon emissions in 25 African countries over 1990-2017. The study also assesses the role of international trade on carbon emissions The novelty of this study is that it jointly considers both production-based and consumption-based carbon emissions approaches in the regional decoupling analysis and the corresponding separate effects of exports and imports on the decoupling process. The Common Correlated Effects Mean Group (CCE-MG) and Augmented Mean Group (AMG) estimation techniques which allow for cross-sectional dependence, heterogeneity, endogeneity, and serial-correlation issues are mainly applied for empirical analysis. The findings invariably indicate some evidence of relative decoupling for production-based emissions, as the threshold levels of GDP per capita are located well within the range of data in all estimations, but above the sample average of $3770. In contrast, there is no robust evidence of decoupling for consumption-related emissions. Primary energy intensity and population are found as the main drivers of carbon emissions. Further, exports and imports have insignificant effects on production-based emissions, but significant and offsetting effects on consumption-based emissions. The policy implication of the study, thus, is that the global community and policymakers need to pay close attention to consumption-based carbon emissions in international climate negotiations and target-setting discussions, as production-related emissions alone would be insufficient for decarbonizing economic growth.