The effects of urbanization and globalization on CO2 emissions: evidence from the Sub-Saharan Africa (SSA) countries

Ecological modernization theories suggest that it is hard to determine a priori the environmental effects of urbanization, while neoliberal doctrine advocates a positive role of globalization in developing economies especially in terms of reducing poverty and inequality. Yet, the environmental effect of globalization is not unanimous. This study employs second-generation panel regression techniques that account for heterogeneous slope coefficients and cross-sectional dependence to estimate the impacts that urbanization and globalization have on CO2 emissions for a panel of 44 Sub-Saharan Africa (SSA) countries for the period 1984-2016. Also, a causality test that considers both these issues is performed. The estimated coefficient of urbanization is positive, statistically significant, and highly consistent across different estimation techniques. The magnitude of the coefficient and level of significance are different in different econometric estimations. In most specifications, the estimated coefficient on the globalization variable is statistically insignificant. Urbanization is found to cause emissions. The environmental implications of these results are discussed with a set of policy recommendations for an environmentally better SSA region.