GVCPs in Zimbabwe's Critical Sectors in the Face of Environmental Pollution and Climate Change: The Case of Agriculture and Mining Sectors

This study analyses global value chain participation (GVCP) in Zimbabwe's two critical sectors of agriculture and mining in the face of environmental pollution and climate change. Mining and agriculture are Zimbabwe's largest export sectors by value, and the later plays a critical role towards food security. However, the two sectors have potential conflicting interests on land as well as environmental pollution. The study employs the Auto Regressive Distributive Lag (ARDL) and ARDL-EC (error correction), to analyse short-run and long-run relationships. The results indicate that, in the short run, lagged GVCP agriculture exerts positive pressure on GVCPagriculture by 0.66% while, climate change (droughts) and pollution (CO2 emissions) exert negative pressure on GVCP agriculture at 5% and 1% level of significance, respectively. However, GVCP mining and population growth did not significantly reduce GVCP agriculture. Moreover, GVCP mining and population growth increase transport CO2 emissions both in the short run and long run at 5% and 1% level, respectively. Thus, mining is not environmentally neutral. In the long run, interaction between population growth and mining rents reduce transport CO2 levels at 5% level. The study recommends government to raise mineral taxes for those participating in mining and use the revenues to subsidise the agriculture sector. In the agriculture sector, government can remove import tax on agriculture equipment such irrigation equipment as well as the removal of other restrictions including opening up grain price to market forces to increase quality and level of participation. The government should continue enacting and enforcing policies which minimize pollution, such as limits on carbon emissions.