Effect of natural resources extraction on energy consumption and carbon dioxide emission in Ghana

Even though many studies have attempted to understand the drivers of carbon dioxide emission and energy consumption to help tackle environmental issues, not much has been done to estimate the effect of natural resources extraction on these two variables. This study analyzes the long run environmental effect of natural resources extraction in Ghana under the Stochastic Impacts by Regression on Population, Affluence and Technology model for the period of 1971-2013. Estimation results indicate that income, urbanization, and extraction of natural resources contribute to Ghana’s environmental problems of rising carbon emission and energy consumption. However, international trade is found to reduce carbon emission. The implications from the results are discussed and the paper recommends among other things the need to strictly enforce laws regulating extractive activities in the country to ensure safe environment; and also to raise tariff and non-tariff barriers on products that do not promote friendly environment and vice versa.