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<p>This study examines the dynamic relationship between green aid (GA) and carbon dioxide (CO₂) emissions in Ethiopia from 2000 to 2023, addressing a significant gap in scholarly knowledge by integrating the Environmental Kuznets Curve (EKC) and pollution halo hypotheses within a sustainable development framework. While existing literature primarily focuses on developed economies or aggregated global analyses, this paper provides novel empirical evidence on how climate finance and renewable energy (REC) interact with industrialization and urbanization in a low-income, climate-vulnerable context. The key research question investigates whether Ethiopia’s green aid inflows effectively mitigate CO₂ emissions while advancing sustainable development goals (SDGs), particularly SDG 7 (Clean Energy) and SDG 13 (Climate Action). Using the ARDL-ECM approach, the analysis captures both short- and long-run effects, complemented by Granger causality tests and impulse response functions (IRFs) to assess relationships and policy impacts. Results indicate that GA and REC significantly reduce emissions, with GA’s mitigation effect strengthening over time, accounting for 18% of emission variance in the long run. This suggests that climate finance progressively mitigates carbon lock-in effects by facilitating cleaner technology adoption and reducing fossil fuel dependence. The study confirms preliminary EKC patterns, indicating that Ethiopia is nearing an emissions turning point, while also highlighting counterproductive foreign direct investment (FDI) effects. These findings challenge assumptions about industrialization’s inevitability in emission growth and stress the urgency of aligning green aid with decarbonization mandates, offering a roadmap for Ethiopia’s Climate-Resilient Green Economy (CRGE) strategy and broader applications in the global South.</p>

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The relationship between green aid and carbon dioxide (CO₂) emissions in ethiopia: potential implications for sustainable development goals (SDGs)

  • 期刊论文

  • 发表日期：

    2025年12月3日

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  • Mulatu Tilahun Debel,
  • Feng Wang

摘要

This study examines the dynamic relationship between green aid (GA) and carbon dioxide (CO₂) emissions in Ethiopia from 2000 to 2023, addressing a significant gap in scholarly knowledge by integrating the Environmental Kuznets Curve (EKC) and pollution halo hypotheses within a sustainable development framework. While existing literature primarily focuses on developed economies or aggregated global analyses, this paper provides novel empirical evidence on how climate finance and renewable energy (REC) interact with industrialization and urbanization in a low-income, climate-vulnerable context. The key research question investigates whether Ethiopia’s green aid inflows effectively mitigate CO₂ emissions while advancing sustainable development goals (SDGs), particularly SDG 7 (Clean Energy) and SDG 13 (Climate Action). Using the ARDL-ECM approach, the analysis captures both short- and long-run effects, complemented by Granger causality tests and impulse response functions (IRFs) to assess relationships and policy impacts. Results indicate that GA and REC significantly reduce emissions, with GA’s mitigation effect strengthening over time, accounting for 18% of emission variance in the long run. This suggests that climate finance progressively mitigates carbon lock-in effects by facilitating cleaner technology adoption and reducing fossil fuel dependence. The study confirms preliminary EKC patterns, indicating that Ethiopia is nearing an emissions turning point, while also highlighting counterproductive foreign direct investment (FDI) effects. These findings challenge assumptions about industrialization’s inevitability in emission growth and stress the urgency of aligning green aid with decarbonization mandates, offering a roadmap for Ethiopia’s Climate-Resilient Green Economy (CRGE) strategy and broader applications in the global South.