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Impact of External Debt and Energy Consumption on Environmental Quality in Somalia

Author

Listed:
  • Zakarie Abdi Warsame

    (Faculty of Economics, SIMAD University, Somalia)

  • Abdirahman Omar Abdi

    (Faculty of Economics, SIMAD University, Somalia)

Abstract

This study investigates the interconnections between external debt, energy consumption, industrialization, and environmental quality in Somalia over the period 1990 to 2019, utilizing the ARDL bounds testing approach. Notably, a positive correlation is found between energy consumption and CO2 emissions, emphasizing the imperative for sustainable practices. In the long run, external debt is observed to have an insignificant impact on environmental quality, suggesting a strategic opportunity for policymakers to channel external funds towards environmentally sustainable projects. Short-term strategies underscore the positive link between decreased industrialization and improved environmental quality, while a cautious approach to external debt is crucial due to its short-term negative impact. The significance of the error correction term underscores the need for adaptive policies. Overall, the study advocates for comprehensive policies integrating sustainable practices and directing external financing towards eco-friendly projects, alongside a capacity building and technology transfer partnerships for environmentally conscious development in Somalia.

Suggested Citation

  • Zakarie Abdi Warsame & Abdirahman Omar Abdi, 2024. "Impact of External Debt and Energy Consumption on Environmental Quality in Somalia," International Journal of Energy Economics and Policy, Econjournals, vol. 14(5), pages 520-526, September.
    • Handle: RePEc:eco:journ2:2024-05-53
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    More about this item

    Keywords

    External Debt; Energy Consumption; Industrialization; CO2; Autoregressive Distributed Lag;
    All these keywords.

    JEL classification:

    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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