Does the Validity of the Environmental Kuznets Curve Postulation Empirically Depend on the Level of Human Development in Africa?
DOI:
https://doi.org/10.47672/ajes.1646Keywords:
Human Development, Environmental Degradation, Environmental Kuznets Curve, HHDICs, MHDICs, LHDICs, PCSE, FGLSAbstract
Purpose: The interconnectedness between human development and environmental degradation is a complex issue that warrants investigation in Africa. Although there are a few studies on the economic growth and environmental degradation nexus for African countries, there is a huge scarcity of empirical research that explores the Environmental Kuznets Curve (EKC) postulation in the context of human development and environmental degradation in Africa. The study therefore empirically explored the relationship between Human Development and Environmental Degradation within the framework of the EKC using 50 African countries subdivided into High Human Development Index Countries (HHDICs), Medium Human Development Index Countries (MHDICs) and Low Human Development Index Countries (LHDICs) from 2000 to 2019. Data for the study were obtained from the World Bank's development indicators and the Human Development Reports of the United Nations Development Programme (UNDP-HDR).
Methodology: The study made use of the Panel Corrected Standard Error (PCSE) model and the Feasible Generalised Least Squares Regression model (FGLS) which are econometrically suitable to handle N > T and T > N panels respectively, and are both robust to cross sectional dependence, contemporaneous correlation, group wise heteroscedasticity and slope heterogeneity. Other econometric techniques such as Descriptive Statistics, Correlation Analysis, Variance Inflation Factor test (Multicollinearity), second generation unit root tests (CADF and CIPS), Durbin Watson, Breusch Godfrey tests (Serial Correlation) and the White Test (Heteroscedasticity) were also employed in the study.
Findings: The empirical results produced evidence that the data is integrated of order one I(1) and exhibits cross sectional dependence, slope heterogeneity and cointegration. The data was also found to be serially correlated and heteroscedastic. However, multicollinearity was absent. The panel estimates of the PCSE and the FGLS estimators showed that Human Development is a key driver of Environmental Degradation in Africa, with the greatest proportion of the impact on HHDICs, followed by MHDICs and then finally LHDICs. The results also revealed the validity of the EKC postulation only in the HHDICs, evidenced by the presence of an inverted U-shaped relationship between Environmental Degradation and Human Development. In The LHDICs and MHDICs on the other hand, U-shaped relationships between Environmental Degradation and Human Development were found, signalling the invalidity of the EKC. There was significant evidence for the support of the feedback hypothesis between Human Development and Environmental Degradation in HHDICs, MHDICs, LHDICs and all the 50 African countries at large. Based on the findings, Policymakers were given recommendations that took into consideration the uniqueness of the economic situations in HHDICs, MHDICs, LHDICs and Africa as a whole.
Unique Contribution to Theory, Practice and Policy: The study shows that the degree of environmental degradation is proportional to the level of human development in Africa and indicates that the validity of the EKC postulation in the context of human development) is exclusive to only the HHDICs in Africa. This provides an incentive for policy makers in the MHDICs and LHDICs of Africa to make human development a priority through industrialisation and other profitable economic activities. This is likely to help them afford innovations and technological developments that protect the environment through the greater use of cleaner energy than the naturally abundant fossil fuel as well as the institutionalisation of policies that protect the environment as human development appreciates.
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