The impact of trade openness and innovation in reducing carbon dioxide emissions: evidence from African countries

In recent years, environmental sustainability has taken centrestage worldwide among policy discussions and business strategist. Thus, it is unsurprising that SDG13 (Sustainable Development Goal) emphasizes the importance of sustainable economic growth through the reduction of greenhouse gas emissions. This study investigated the impact of trade on carbon dioxide (CO2) emissions in a cross-country panel of 32 African countries from 1990 to 2020, using the Generalized Methods of Moments techniques. Within the context of the Environmental Kuznets Hypothesis, the study estimated the existence of the inverted U-shaped curve to model the relationship between gross domestic product (GDP) and carbon emissions. The control variables were trade openness, renewable energy, innovation, and human capital. The findings show the presence of the Kuznets hypothesis for the group of African countries. The study also showed that trade openness exacerbates emissions, and continued innovations reduce the amount of carbon emissions. Renewable energy produces significantly less carbon emissions, which was substantial in both estimated models. The study suggests promoting economic growth through knowledge spillovers and pursuing regional integration and assimilation of innovation into all stages of development for green growth.