Carbon-dioxide emissions management in Sub-Saharan Africa – the irrelevance of natural resource rent as a corrective policy tool

ABSTRACT

This paper revisits the role of natural resource rent in explaining and regulating CO₂ emissions in Sub-Saharan Africa (SSA). Three variants of CO₂ emissions are considered: territorial CO₂ emissions, consumption-based CO₂ emissions, and CO₂ emission intensity. Panel-corrected standard error and panel autoregressive distributed lag estimation methods were applied. Results show that natural resource rent has a positive effect on consumption-based CO₂ emissions, and a negative effect on CO₂ emission intensity, but has no effect on territorial CO₂ emissions. The results show that while high resource rent in SSA appears to finance consumption of pollution-laden imported goods, it worsens neither territorial CO₂ emissions nor CO₂ emission intensity. Given that importation of dirty goods is an economic system failure which is not imputable to resource rent, it is safe to conclude that, resource rent does not contribute to rising CO₂ emissions in SSA.

Key Policy Highlights

• This paper examined the role of natural resource rent in explaining three variants of CO₂ emissions; territorial CO₂ emissions, consumption-based CO₂ emissions, and CO₂ emission intensity.

• Resource rent has a positive effect on consumption-based CO₂ emissions, and a negative effect on CO₂ emission intensity, but has no effect on territorial CO₂ emissions.

• While high resource rent in SSA appears to finance consumption of pollution-laden goods, it worsens neither territorial CO₂ emissions nor CO₂ emission intensity.

• The relationship between resource rent and the three measures of CO₂ emissions suggests that resource rent may not be an important contributor to rising CO₂ emissions in SSA.

KEYWORDS:

• CO₂ emission intensity
• consumption-based CO₂ emissions
• territorial CO₂ emissions
• resource rent

JEL CODES:

• Q52
• Q53
• Q54

Disclosure statement

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

Notes

1 Ecological foot print.