Abstract

The purpose of this study is to critically assess the relationship between international trade and carbon dioxide (CO₂) emissions to identify the key driving forces in Africa at different income levels. In examining the causal effects of net trade on CO₂ emission loads from 1960 to 2012 with a number of other anthropogenic driving forces, we employed a panel dataset, an augmented STIRPATN models and techniques of Generalised Least Squares to determine the quantitative magnitude impacts of net trade on CO₂ emissions. The results suggest that CO₂ emissions have statistical significant impact on net trade, population size, manufacturing sector and services sector. The final consumption expenditure (annual growth) cannot be used to explain CO₂ emission loads in Africa, as it is not statistically significant at all in different income levels. The estimated results indicate that, the average effect of net trade over CO₂ emissions, when the net trade changes across time and between countries increases by 1%, CO₂ emissions increases by about 1.02 and 2.24% for low income countries and middle income countries, respectively, when all the other predictors are constant.

Key words: International trade, population size, carbon dioxide emissions, net trade.