A study on the responsiveness of the environment to international trade, energy consumption, and economic growth. The case of Ghana

Abstract

Abstract The study examined the responsiveness of the environment of Ghana to changes in key economic indicators such as the international trade, energy consumption, urbanization, economic growth, and financial development. Our study utilized the ecological footprint as the indicator for environmental degradation as it encompasses the entire ecosystem that supports humankind consumption and activities. Consequently, the use of ecological footprint gives a clear and a bigger picture of environmental degradation than any individual pollutant(s). This study takes into cognizance the influence of structural break in the time series variables. The findings from the dynamic ordinary least square (DOLS) established the existence of an inverted N‐shaped environmental degradation‐economic growth relationship for Ghana under the cubic EKC framework. The ARDL bound testing approach confirmed the presence of long‐run cointegration among the variables. Furthermore, the bootstrap causality revealed a unidirectional causality running from energy consumption to export and urbanization to export. Our study, therefore, advocates for the production and consumption of enhanced energy‐efficient products and commodities among the populace of Ghana.

Keywords

• bootstrapped causality
• cointegration
• economic growth
• energy consumption
• environmental degradation
• Ghana