The impact of economic growth on carbon emissions in Kenya : an Environmental Kuznets Curve analysis

Abstract

Attaining economic growth whilst maintaining environmental quality is one of the greatest challenges today. This study investigated the impact of gross domestic product, energy consumption, trade openness, urbanization, foreign direct investment, and financial development on carbon emissions in Kenya. The study uses the autoregressive distributed lag technique to analyze the presence of the environmental Kuznets curve hypothesis using model with secondary data from the period 1971–2019. The results do not validate the environmental Kuznets curve hypothesis in Kenya. Furthermore, the study shows that an increase in energy usage increases carbon emissions. Trade openness and financial development also increase emissions of carbon dioxide in the long run. Additionally, urbanization and foreign direct investment have a negative relationship with carbon dioxide emissions. From the results, EKC is not a good foundation for formulating environmental policy in Kenya. The relationship between economic growth and environmental pollution is quite weak. Economic development may be suitable with better environmental conditions, but this demands a very deliberate policy agenda and a willingness to generate energy and goods in the most environmentally friendly way possible.