The Causal Links between Urbanization, Energy Use and Carbon Emissions: A Case of SADC Region

Abstract

The study aimed at examining the causal links between urbanization, energy consumption and carbon emissions in the case of selected SADC countries. The study employed annual time series data spanning from 1988 to 2020 extracted from the World Bank Development indicator Databank. A Pedroni cointegration test was employed to test whether the variables of interest move together in the long run. Granger causality backed with Full Modified Ordinary Least Squares (FMOLS) was used to detect the direction and the nature of causality among the variables of interest. The results from Pedroni cointegration test revealed that the variables move together in the long run. Granger causality results indicate bidirectional causality among the three variables in the short-run and one way Granger causality running from both energy consumption and urbanization to carbon emission in the long-run. Furthermore, the FMOLS shows the positive contribution of both energy consumption and urbanization to carbon dioxide emissions. The results from the empirical work make some significant contribution to the existing body of knowledge and to the policy makers and urban planners of SADC region. Policies in this region should focus on finding coherent ways of discouraging movements of people from rural areas to urban areas. This can be done by making rural environment conducive enough to motivate people to engage in agricultural activities.

Keywords: Urbanization; Energy Consumption; Carbon Emissions, SADC region