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Towards Environmental Sustainability: The Impact of External Debt and Government Expenditure on Carbon Emissions in Somalia

Author

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  • Zakarie Abdi Warsame

    (Faculty of Economics, SIMAD University, Mogadishu, Banadir, Somalia)

  • Ahmed Nur Dirie

    (Faculty of Economics, SIMAD University, Mogadishu, Banadir, Somalia)

  • Bile Abdisalan Nor

    (Faculty of Management Sciences, SIMAD University, Mogadishu, Banadir, Somalia)

Abstract

This study aims to assess the effect of external debt and government expenditure on carbon emissions in Somalia. To do so, the study employed a rigorous econometric approaches such as autoregressive distributed lag model (ARDL), Fully modified least square (FMOLS), and Dynamic least square (DOLS). Findings demonstrated that external debt (LNED) positively and significantly affects carbon emissions. Results revealed that a 1%, or a point increase of external debt, rises 0.29% into the emitted emissions. Moreover, the study found that the long-run coefficient of government expenditure (LNGE) positively correlates with emissions. However, a 1% increase in total government expenditure significantly increases CO2 emissions by 0.05% in the long run. So, regarding the positive correlation between external debt, government expenditure, and carbon emissions, the study suggests that the government should strategically use its expenditures and external debt to fund environmentally sustainable projects. This approach aims to reduce carbon emissions while promoting sustainable development and balancing economic growth with ecological conservation.

Suggested Citation

  • Zakarie Abdi Warsame & Ahmed Nur Dirie & Bile Abdisalan Nor, 2024. "Towards Environmental Sustainability: The Impact of External Debt and Government Expenditure on Carbon Emissions in Somalia," International Journal of Energy Economics and Policy, Econjournals, vol. 14(6), pages 566-573, November.
    • Handle: RePEc:eco:journ2:2024-06-55
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    References listed on IDEAS

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    1. Zakarie Abdi Warsame & Ahmed Nur Dirie & Bile Abdisalan Nor, 2024. "Towards Environmental Sustainability: The Impact of External Debt and Government Expenditure on Carbon Emissions in Somalia," International Journal of Energy Economics and Policy, Econjournals, vol. 14(6), pages 566-573, November.

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    More about this item

    Keywords

    External Debt; Heavily Indebted Poor Countries; Carbon Emissions; Environmental Sustainability; and Autoregressive Distributed Lag Model;
    All these keywords.

    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • P1 - Political Economy and Comparative Economic Systems - - Capitalist Economies
    • P3 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions

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