Determinants of CO2 emissions: exploring the unexplored in low-income countries

Abstract

In thirst for economic growth, economies are engaged in anti-environmental activities that drive them towards climate change and CO₂ emissions. Extensive CO₂ emissions is a serious threat around the globe, especially in low-income countries that can prove detrimental to the environment. To prevent the worst impacts of carbon emission, it becomes necessary to explore the cause of CO₂ emissions. In this vein, this work is conducted to evaluate the determinants of CO₂ emissions in low-income countries spanning from 2000 to 2020. For estimation of models, panel data techniques are employed. The outcome of the study revealed that trade FDI, urbanization, and GDP per capita are the main contributing factors to environmental degradation. Trade openness has also impacted environmental degradation positively but insignificantly. In contrast, population density and domestic credit to private sector (DCPS) have negatively impacted low-income countries' carbon emissions. The study extended important policy implications to low-income countries' governments and environmental policymakers.

Keywords: CO2 emissions; FDI; Low-income countries; Per capita GDP; Population density; Trade openness; Urbanization.