<p>This paper investigates the complex relationships between carbon emissions, economic growth, trade openness and urbanization in Somalia, a fragile state where these dynamics remain understudied. using annual data for 1991–2022, we apply a vector error correction model (VECM) to analyses both long-run cointegration and short-run causal relationships among CO<sub>2</sub> emissions, urbanization, economic growth, energy consumption, trade openness, and foreign direct investment (FDI). The empirical results reveal a long-run equilibrium relationship in which economic growth and energy consumption significantly increase CO<sub>2</sub> emissions. In contrast, urbanization and FDI exhibit statistically significant negative long-run impacts on emissions, suggesting that urbanization may generate efficiency gains while FDI could produce a ‘‘pollution halo’’ effect. Trade openness had a modest positive impact. The Granger causality tests indicate immediate pressure on carbon emissions from growth, trade and urbanization. The findings underscore Somalia’s emissions-intensive development trajectory. However, targeted policies promoting sustainable urbanization, green FDI and to renewable energy transitions could decouple economic growth from environmental degradation, fostering sustainable development. A key limitation on this study is the omission of potential critical variables such as institutional quality or renewable energy uptake, due to data constraints which may affect the comprehensiveness of the findings. This study provides critical insights for policymakers seeking to balance economic progress with environmental sustainability in fragile states.</p>

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Carbon emissions economic growth trade openness and urbanization nexus in Somalia

  • Sharif Abdi Mohamed,
  • Abdikani Yusuf Abdulle

摘要

This paper investigates the complex relationships between carbon emissions, economic growth, trade openness and urbanization in Somalia, a fragile state where these dynamics remain understudied. using annual data for 1991–2022, we apply a vector error correction model (VECM) to analyses both long-run cointegration and short-run causal relationships among CO2 emissions, urbanization, economic growth, energy consumption, trade openness, and foreign direct investment (FDI). The empirical results reveal a long-run equilibrium relationship in which economic growth and energy consumption significantly increase CO2 emissions. In contrast, urbanization and FDI exhibit statistically significant negative long-run impacts on emissions, suggesting that urbanization may generate efficiency gains while FDI could produce a ‘‘pollution halo’’ effect. Trade openness had a modest positive impact. The Granger causality tests indicate immediate pressure on carbon emissions from growth, trade and urbanization. The findings underscore Somalia’s emissions-intensive development trajectory. However, targeted policies promoting sustainable urbanization, green FDI and to renewable energy transitions could decouple economic growth from environmental degradation, fostering sustainable development. A key limitation on this study is the omission of potential critical variables such as institutional quality or renewable energy uptake, due to data constraints which may affect the comprehensiveness of the findings. This study provides critical insights for policymakers seeking to balance economic progress with environmental sustainability in fragile states.