Investigating institutional quality and carbon mitigation drive in Sub-Saharan Africa: Are growth levels, energy use, population, and industrialization consequential factors?

Abstract

In view of the United Nations’ Sustainable Development Goals on clean and responsible energy consumption, climate change mitigation, and sustainable economic growth (UN-SDGs-7, 11–13), this study examines institutional quality (IQ)–carbon emissions nexus in the framework of the Environmental Kuznets Curve (EKC) hypothesis. Six dimensions of IQ from the World Governance Indicators (WGIs) were used while focusing on Sub-Saharan African (SSA) countries between 1996 and 2019. After controlling for growth, energy use, and industrialization levels, the empirical results validated the EKC hypothesis for the SSA as a unit increase in economic growth initially worsens the environment while further economic expansion eventually improves the environment. However, mixed results were obtained on the effects of IQ indicators. CO2 emissions are only substantially reduced by corruption control, regulatory quality, and the rule of law among other IQ measures. Furthermore, the causality analysis showed a unidirectional causality between growth and environmentally detrimental energy consumption levels coupled with a two-way emission-population growth causality flow as well as a two-way emissions—IQ causality channel. While economic growth, energy use, and industrialization levels undermine environmental sustainability in the SSA region via increased carbon emissions, the overall findings signal the moderating roles of IQ. Hence, the strengthening of institutions is recommended for environmental sustainability enhancement in the SSA region.