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ORIGINAL RESEARCH article

Front. Environ. Econ.
Sec. Energy Economics
Volume 2 - 2023 | doi: 10.3389/frevc.2023.1265329
This article is part of the Research Topic Mapping pathways towards resilient and sustainable industrial production View all 5 articles

Towards decarbonization in Ghana: Is financial development a panacea? Evidence from the rolling window bootstrap Granger causality test

Provisionally accepted
Felix Nutakor Felix Nutakor 1Michael K. Minlah Michael K. Minlah 1,2Philipine N. Ganyoh Philipine N. Ganyoh 3Benjamin Sanful Benjamin Sanful 4Jinke Li Jinke Li 1*
  • 1 Qingdao University, Qingdao, Shandong Province, China
  • 2 University of Professional Studies, Accra, Ghana
  • 3 Ghana Institute of Management and Public Administration (GIMPA), Accra, Ghana
  • 4 Liaoning University, Shenyang, Liaoning Province, China

The final, formatted version of the article will be published soon.

    This research paper examines the effect of financial development and CO2 emissions in Ghana between 1960 and 2021, using the Bootstrap Rolling window bootstrap Granger causality test. The methodology, examining the impact of financial development on carbon dioxide emissions within sub-samples of the full sample employed, also allows feedback from carbon dioxide emissions to financial development. The study sought to investigate whether financial development can serve as a panacea to the menace of rising carbon dioxide emissions in Ghana. The study's findings reveal that financial development positively influences CO2 emissions during the sample periods in which it causes Granger causality to CO2 emissions. Additionally, significant feedback from CO2 emissions to financial development is observed in the sub-samples where CO2 emissions cause Granger causality to financial development. The results reveal that financial development will aggravate carbon dioxide emissions in Ghana without the appropriate policy frameworks in place. Proceeding from the study results, the study recommends financial incentives, establishment of green investment funds, carbon pricing mechanisms such as carbon taxes or cap-and-trade systems, subsidies, and favorable regulatory frameworks to promote adopting and expanding renewable energy sources, which will consequently CO2 ameliorate emissions.

    Keywords: CO2 emissions, Financial Development, rolling window, Granger causality, Ghana

    Received: 26 Jul 2023; Accepted: 24 Nov 2023.

    Copyright: © 2023 Nutakor, Minlah, Ganyoh, Sanful and Li. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

    * Correspondence: Jinke Li, Qingdao University, Qingdao, 266071, Shandong Province, China

    Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.