Transport energy consumption and environmental quality: Does urbanization matter?

Previous studies on environmental quality have emphasized the importance of transportation and urbanization in influencing carbon emission globally. While the theoretical and empirical discussions remain inconclusive and controversial, the question of whether transport energy consumption and urbanization induce emissions of carbon dioxide in sub-Saharan Africa (SSA) remains unclear. This study contributes to the ensuing debate on sustainable transportation and urban development, focusing on the link between transport energy consumption, urbanization and carbon emissions in 19 SSA countries over 31 years (1980-2011). Using the IV-GMM estimator that accounts for endogeneity and cross-sectional dependence inherent in panel dataset, three key findings emerge from the study. First, we find substantial evidence that CO2 emission increases with transport energy consumption and decreases with urbanization. Second, factors such as electricity consumption and population growth rate worsen CO2 emission, whereas regulatory quality and FDI significantly reduce carbon emission in the region. Third, the predicted effect of urbanization and transport energy consumption on CO2 emission vary quite dramatically across SSA countries. We argue for drastic policies tailored towards reducing carbon emission in SSA.