CO 2 EMISSIONS, ENERGY CONSUMPTION, INCOME AND TRADE OPENNESS: A SOUTH AFRICAN PERSPECTIVE. Marcel Kohler University of KwaZulu-Natal ([email protected]). Background:.
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tested by Grossman and Krueger (1991).
Heckscher-Ohlin Theory –vs- Pollution Havens Hypothesis.
Source: IEA (2010)
ct= 0+ 1 et+ 2 yt+ 3 y2t+ 4 ft+ t
ctis CO2 emissions per capita,
etis commercial energy use per capita,
ytis per capita real income,
y2tis square of per capita real income,
ftis openness ratio which is used as a proxy for foreign trade, and
etis the regression error term.
to test the validity of the EKC hypothesis
instead of OLS because variables are non-stationary.
previous CO2 emissions and the income variables are insignificant factors in explaining current changes in CO2 emissions.
energy usage is significant and positive as theory predicts.
Surprisingly the trade openness variable is also significant but negative. This suggests that an increase in SA’s openness to trade will in fact serve to decrease CO2 emissions.
South Africa behaves as a developed nation contrary to the predictions of the PHH but in support of the FEH.