Trade integration, institutions, and environmental quality in Africa: Network-based approach

The continent of Africa is renowned for having the lowest carbon dioxide (CO2) emissions. However, recent development and industrialization are driving emissions upward, with detrimental effects on human health and the acceleration of climate change. Given that a country's position in the trade network reflects the potential for economic growth, we hypothesize that it might also affect CO2 emissions, highlighting potential trade-environment trade-offs between establishing strategic trade partners and environmental policies. This paper analyzes the effect of countries' positions in the African trade network and institutional quality on CO2 emissions in 50 African countries from 2000 to 2020. Employing the system generalized method of moments, we find that a country's network position generally positively affects environmental quality. The results validate the existence of the Environmental Kuznets Curve hypothesis in Africa and remain consistent across the different network centrality measures and alternative environmental indicators. Institutional quality influences emissions directly and indirectly by shaping a country's position and geopolitical influence within African trade. The findings suggest that African countries should improve institutional quality and strategically strengthen their trade interconnectedness—by diversifying trade partners, acting as key intermediaries, and boosting overall network influence— to design optimal policies, given their need to develop economically while protecting the environment.