Environmental Impact of Trade Sector Growth: Evidence from Tanzania

Authors: Mosses E. Lufuke

Abstract:

This paper attempted to investigate whether there is Granger-causality running from trade to environment as evidenced in the changing climatic condition and land degradation. Using Tanzania as the reference, VAR-Granger-causality test was employed to rationalize the conundrum of causal-effect relationship between trade and environment. The changing climatic condition, as the proxy of both nitrous oxide emissions (in thousand metric tons of CO₂ equivalent) and land degradation measured by the size of arable land were tested against trade using both exports and imports variables. The result indicated that neither of the trade variables Granger-cause the variability on gas emissions and arable land size. This suggests the possibility that all trade concerns in relation to environment to have been internalized in domestic policies to offset any likely negative consequence.

Keywords: Trade, growth, impact, environment.

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1129798

References:

[1] Ministry of Natural Resources and Tourism, “Tanzania Toorism Sector Survey: The 2008 International Visitors’ Exit Survey Report (Report style),” Dar es Salaam: Ministry of Natural Resources and Tourism, 2010.
[2] B. Cooksey, “The investment and business environment for gold exploration and mining in Tanzania (Report style),” London: Africa Power and Politics, 2011.
[3] N. C. Boocock, “Environmental impact of foreign direct investment in the mining sector in Sub-Saharan Africa (Report style),” Paris: OECD, 2002.
[4] Southern African Development Community, “Trade performance review: Tanzania (Report style),” Harare: SADC, 2005.
[5] W. Timiza, “Status and Priority needs of monitoring and predicting climate anomalies and extremes in Tanzania (Presentation style),” Tanzania Meteorological Agency. (Regional workshop on climate monitoring and analysis on climate variability, 15th-18th April 2013: Pretoria).
[6] The Ministry of Finance and Economic Affairs, “The economic survey (Report style),” Dar es Salaam: Ministry of Finance and Economic Affairs, 2010.
[7] K. A. Kulindwa and G. D. Mjema, “Foreign trade and the environment in Tanzania (Journal style),” UTAFITI Special Issue, vol. 4, 2001, pp. 31-42.
[8] B. K. Kaale, “Review of trade issues for management of Tanzania’s coastal forest (Report style),” Dar es Salaam: WWF-Eastern Africa Regional Programme Office, 2004.
[9] J. Earley, T. Earley and M. Straub, “Specific environmental effects of trade liberalization: Oilseeds (Report style),” Washington: International Food and Agricultural Trade Policy Council, 2005.
[10] M. Saruni, “Determinants of trade balance in Tanzania (Unpublished work style),” Unpublished.
[11] United Nations Environmental Programme, “2000 Annual Report (Report style),” Nairobi: UNEP, 2000.
[12] S. Candice, “The environmental effect of trade (Report style),” Paris: The Organization for Economic Co-operation and Development, 2007.
[13] J. Beghin and M. Potier, “Effects of trade liberalization on the environment in the manufacturing sector (Journal style),” The World Economy, vol. 20, 2002, pp. 435-456.
[14] R. J. Goettle and A. A. Fawcett, “The structural effects of cap and trade climate policy (Journal type),” Energy Economics, vol. 31, 2009, pp. 244-253.
[15] D. Asteriou and S. D. Hall, Applied Econometrics (Book type). 3rd Edition. New York: Palgrave MacMillan Education, 2015.
[16] S. Khalil and Z. Inam, “Is trade good for environment? A unit root co-integration analysis (Journal type),” The Pakistan Development Review, vol. 45, 2006, pp. 1187-1196.
[17] J. A. John and N. R. Draper, An alternative family of transformation (Journal type),” Journal of the royal statistical society series, vol. 29, 1980, pp. 190-197.