Effects of environmental quality on agricultural productivity in sub Saharan African countries: A second generation panel based empirical assessment

Abstract

Agriculture is the backbone of most sub-Saharan Africa economies, but environmental quality, so vital for agricultural production, is being challenged by climate change. However, most studies measure environmental quality using one variable, CO2 emissions. In this study, a more enhanced measure of environmental quality, which incorporates three indicators (per capita CO2 emissions, energy intensity and adjusted national savings), is used. A set of second-generation panel data techniques that address some potentially crucial panel data estimation issues such as cross sectional dependence and cross country heterogeneity, are employed. Data on 24 sub-Saharan Africa countries over the period 1984 to 2016 were analysed. The impact on agricultural productivity of two of the three indicators of environmental quality, namely CO2 emissions and adjusted national savings, has expected signs, negative and positive, respectively. Estimates using different methods suggest a detrimental effect of per capita CO2 emissions on agricultural productivity in sub-Saharan Africa. A 1% rise in per capita CO2 emissions induces a 0.04% to 0.06% decline in agricultural productivity. Deteriorating environment quality as a result of climate change is slowly but negatively impacting sub-Saharan Africa agricultural productivity.