Emma-3008/Africa-s-Transition-into-low-carbon-future

This study explores the impact of climate change on sustainable economic growth and environmental sustainability in Sub-Saharan Africa (SSA). It investigates how environmental taxation, foreign direct investment (FDI), natural resource rent, and technological innovation contribute to achieving a low-carbon future. # Africa's Transition into a Low-Carbon Future: Evidence on the Nexus Between Environmental Tax, Foreign Direct Investment, Resource Dependence, and Technological Progress ## Summary This study explores the impact of climate change on sustainable economic growth and environmental sustainability in Sub-Saharan Africa (SSA). It investigates how environmental taxation, foreign direct investment (FDI), natural resource rent, and technological innovation contribute to achieving a low-carbon future. Using data from 1995 to 2019 and advanced econometric techniques (Cross-Sectional Augmented Autoregressive Distributed Lag and Method of Moments Quantile Regression), the findings suggest that environmental taxes effectively reduce carbon emissions. While FDI initially increases emissions in the short term, it leads to a significant reduction over time. Natural resource rent exacerbates environmental degradation, while technological innovation contributes to long-term emission reductions. The study confirms that environmental taxation consistently lowers CO₂ emissions across all quantiles. Based on these findings, the study recommends that policymakers implement stricter carbon tax policies, establish sub-regional carbon offset markets, and prioritize investments in clean energy infrastructure to support long-term sustainability. ## Introduction With the global emphasis on balancing economic growth and sustainability in light of climate change, Sub-Saharan Africa (SSA) holds significant potential to transition to a low-carbon economy. This opportunity arises from its abundant renewable resources and green technologies. However, achieving this transition requires a multi-faceted approach involving environmental taxes, foreign investments, resource management, and technological advancements. This study aims to assess the feasibility of a leapfrog approach for decarbonization in SSA, exploring the interplay of environmental tax, foreign investment, natural resource rents, …