Climate Change and Economic Growth: A Time Series Analysis

This study examined the relationship between climate change and economic growth in Zambia using annual data from 1990 to 2023. The study employed an Autoregressive Distributed Lag (ARDL) model to analyse the impact of rainfall variability, crop production index as a proxy for agriculture production, Foreign Direct Investment (FDI), trade openness, natural resource depletion and control of corruption on economic growth. The ARDL bounds test shows the existence of cointegration among the variables. Rainfall, natural resource depletion and control of corruption were found to have a positive and statistically significant effect on economic growth in the long run, while the crop production index had a negative and significant effect, reflecting structural weaknesses and climate vulnerability in the agricultural sector. FDI and trade openness were found to have insignificant effects on growth. In the short run, rainfall exhibited both positive and negative lagged effects, highlighting the disruptive nature of climate variability. The study recommends strengthening climate resilience through climate-smart agriculture, improved water management, irrigation development and early warning systems to support sustainable economic growth in Zambia.