Abstract
Although West African nations are flourishing economically of late, they still have environmental issues due to the high rate of emissions in the bloc. Despite the worsening environmental condition, there have been limited studies on the causal agents of this situation in the region. Therefore, drawing strength from the United Nations’ Sustainable Development Goals (SDGs) and their targeted impacts of 2030, this study explored the nexus between financial development and environmental sustainability in West Africa (WA) for the period 1990 to 2016. The cross-sectional autoregressive distributed lag (CS-ARDL) estimator alongside the cross-sectionally augmented distributed lag (CS-DL) and the cross-sectional augmented error correction (CAEC) estimators were engaged to examine the elastic effects of the explanatory variables on the explained variable and from the results, financial development was harmful to environmental sustainability in WA through high carbon emissions. Also, control variables foreign direct investments, energy consumption, industrialization, and population growth were detrimental to the sustainability of the environment. On the causal connections amid the series, a unidirectional causality from financial development and population growth to carbon emissions was uncovered. Also, feedback causalities between foreign direct investments and carbon emissions, between energy consumption and the effluents of carbon, and between industrialization and environmental pollution were unraveled. Based on the findings, the study recommended among others that the countries should integrate environmental welfare objectives into their financial development policies. Also, the nations should ensure that their citizens have access to energy that is affordable, reliable, sustainable, and modern (SDG 7). Finally, improvement in energy efficiency, sustainable infrastructure, and good use of resources (SDG 12) should be promoted by the nations. The above recommendations if seriously taken into consideration will help the region to combat climate change and its impacts, which is the focus of SDG 13. The main flaw of this exploration was the lack of data for some specific time periods. Therefore, in future when such data become available, similar investigations could be carried out to confirm the robustness of the study’s results.
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Availability of data and materials
The datasets used and/or analyzed during the current study are available from the corresponding author on reasonable request.
Change history
01 April 2024
This article has been retracted. Please see the Retraction Notice for more detail: https://doi.org/10.1007/s11356-024-32885-y
Abbreviations
- GHG:
-
Greenhouse gases
- FD:
-
Financial development
- ES:
-
Environmental sustainability
- WA:
-
West Africa
- WRICAIT:
-
World Resources Institute Climate Analysis Indicators Tool
- FDI:
-
Foreign Direct Investments
- EC:
-
Energy consumption
- IND:
-
Industrialization
- POP:
-
Population growth
- AMG:
-
Augmented mean group
- DCCEMG:
-
Dynamic common correlated effects mean group
- CCEMG:
-
Common correlated effects mean group
- CCE:
-
Common correlated effects
- DCCE:
-
Dynamic common correlated effects
- GMM:
-
Generalized method of moments
- W-E:
-
Westerlund and Edgerton
- DH:
-
Durbin-Hausman
- PHH:
-
Pollution haven hypothesis
- PH:
-
Porter hypothesis
- CS-ARDL:
-
Cross-sectional autoregressive distributed lag
- CS-DL:
-
Cross-sectionally augmented distributed lag
- CAEC:
-
Cross-sectional augmented error correction
- WDI:
-
World Development Indicators
- CADF:
-
Cross-sectionally Augmented Dickey-Fuller
- CIPS:
-
Cross-sectional Im, Pesaran and Shin
- FMOLS:
-
Fully modified ordinary least squares
- ARDL:
-
Autoregressive distributed lag
- DSUR:
-
Dynamic seemingly unrelated regression
- ECT:
-
Error correction term
- ASEAN:
-
Association of Southeast Asian Nations
- BRI:
-
Belt and Road Initiative
- ARDL:
-
Autoregressive distributed lag
- PMG:
-
Pooled mean group
- BRICS:
-
Brazil, Russia, India, China, and South Africa
- GCC:
-
Gulf Cooperation Council
- D-H:
-
Dumitrescu and Hurlin
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Musah, M., Owusu-Akomeah, M., Nyeadi, J.D. et al. RETRACTED ARTICLE: Financial development and environmental sustainability in West Africa: evidence from heterogeneous and cross-sectionally correlated models. Environ Sci Pollut Res 29, 12313–12335 (2022). https://doi.org/10.1007/s11356-021-16512-8
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DOI: https://doi.org/10.1007/s11356-021-16512-8