An Augmented Environmental Kuznets Curve (EKC) and a New Measure for Water Pollution – An Investigation of Water Pollution in Africa

43 Pages Posted: 1 Nov 2022 Last revised: 27 Mar 2024

See all articles by Nina Kupzig

Nina Kupzig

Ruhr University of Bochum - Faculty of Economics

Johanna Meier

Ruhr University of Bochum - Faculty of Economics

Jenny Kupzig

Ruhr University of Bochum

Date Written: March 14, 2023

Abstract

Water pollution constitutes an increasingly urgent problem worldwide. This study investigates an augmented Environmental Kuznets Curve considering trade and institutional quality for water pollution in Africa. As a novel feature, we use newly estimated data on water pollution from the WorldQual model, the global water quality model of the WaterGAP3 Framework. Using data from 2002 to 2016 for 42 African countries, we employ static and dynamic panel estimation techniques, specifically cross-section ordinary least squares and fixed effects regressions, and the system generalised method of moments. In static analyses, we uncover an inverted U-shaped EKC, with economic growth initially exacerbating pollution until reaching turning points between 6,244 and 8,974 USD of GDP per capita. Yet, the dynamic analyses suggest the relationship between GDP and pollution is insignificant. Our results indicate that institutional quality increases water pollution, while trade’s effect is inconclusive. Regarding the interaction effect, we find that the impact of institutional quality on water pollution depends on the level of trade. Specifically, at high levels of trade, higher institutional quality is associated with less water pollution, while at low levels of trade, higher in institutional quality is associated with more pollution. This study highlights the complex interplay of factors that must be navigated to effectively address the challenge of water pollution in Africa.

Keywords: Environmental Kuznets Curve, Trade, Institutional Quality, Developing countries

JEL Classification: O13, Q53, Q56

Suggested Citation

Kupzig, Nina and Meier, Johanna and Kupzig, Jenny, An Augmented Environmental Kuznets Curve (EKC) and a New Measure for Water Pollution – An Investigation of Water Pollution in Africa (March 14, 2023). Available at SSRN: https://ssrn.com/abstract=4263793 or http://dx.doi.org/10.2139/ssrn.4263793

Nina Kupzig (Contact Author)

Ruhr University of Bochum - Faculty of Economics ( email )

Ruhr University of Bochum
Faculty of Management and Economics
D-44780 Bochum, DE 44780
Germany

Johanna Meier

Ruhr University of Bochum - Faculty of Economics ( email )

Ruhr University of Bochum
Faculty of Economics
D-44780 Bochum, DE 44780
Germany

Jenny Kupzig

Ruhr University of Bochum ( email )

Universitätsstraße 150
Bochum, NRW 44780
Germany

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