Is Aggregate Domestic Consumption Spending (ADCS) Per Capita Determining CO2 Emissions in South Africa? A New Perspective

Aggregate domestic consumption spending is one of the prime drivers of economic progress that facilitates the process of industrialization, international trade, and innovation, but its effect on the environment remains underresearched. This paper proposes a novel framework to explain the impact of aggregate domestic consumption spending per capita (ADCSP) on carbon dioxide emissions (CO2e) in South Africa. Using the autoregressive distributed lag (ARDL) technique, the results indicated that the ADCSP determines CO2e in the short-run (SR) and long-run (LR). From ADCSP to carbon intensity (ADCSP-CI) estimations, it was observed that an increase (1%) in ADCSP increases CO2e in both the LR (0.31%) and SR (0.22%). Furthermore, the NARDL estimations showed that the LR effects of positive shocks in the ADCSP on CO2e are comparatively stronger than the SR effects. The paper offers important policy implications for academics, theorists, and policymakers.