Does trade openness mitigate the environmental degradation in South Africa?

The debate over the role international trade plays in determining environmental outcomes has considerably generated more heat than light. Theoretical work has been successful in identifying a series of hypotheses linking openness to trade and environmental quality, but the empirical verification of these hypotheses has seriously lagged. This study revisits the dynamic relationship between trade openness and environmental quality in South Africa using time series data over the period 1960-2020. The recently developed novel dynamic autoregressive distributed lag (ARDL) simulation framework has been used. The outcomes of the analysis indicate that (i) trade openness deteriorates environmental quality in the long run, although it is environmentally friendly in the short run; (ii) the scale effect increases CO2 emissions, whereas the technique effect contributes to lower it, thus validating the presence of an environmental Kuznets curve (EKC) hypothesis; (iii) energy consumption, foreign direct investment, and industrial value-added contribute to environmental deterioration; (iv) technological innovation improves environmental quality; (v) the pollution haven hypothesis (PHH) exists; and (vi) InSE, InTE, InOPEN, InEC, InFDI, InTECH, and InIGDP Granger-cause InCO2 in the medium, long, and short run suggesting that these variables are important to influence CO2 emissions. In light of our empirical evidence, this paper suggests that the international teamwork to lessen carbon emissions is immensely critical to solve the growing trans-boundary environmental decay and other associated spillover consequences. © 2021. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.

Citation

Maxwell Chukwudi Udeagha, Nicholas Ngepah. Does trade openness mitigate the environmental degradation in South Africa? Environmental science and pollution research international. 2022 Mar;29(13):19352-19377

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PMID: 34716897

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