Planetary health issues in the developing world : dynamics between transportation systems, sustainable economic development, and CO2 emissions

Abstract

The earth is experiencing unprecedented global warming and this has an adverse impact on the health of the planet, people and economies. A major contributor to the degradation of planetary health is CO2 emissions that are contributed by the transportation sector. The brunt of the environmental degradation is experienced by developing countries, where the transportation sector is dependent on cheaper fossil-fuels. This study examines the causal interface between transportation infrastructure development, economic growth, institutional quality, and CO2 emissions in 79 developing countries over the period 2005 to 2022. A quantile-on-Quintile regression (QQR) and vector error-correction model (VECM) are deployed to study the causal relationships between the above-mentioned variables. The empirical findings show strong endogenous relationships between the variables in the short-run and long-run. The concerning trend is that, while the transportation sector and improvement in the institutions contribute positively to the economic growth of these countries, CO2 emissions (from the transportation sector) have a detrimental, and perhaps larger, impact on economic growth. A key insight from these findings is that there is a need to reduce CO2 emissions by ensuring greater use of renewable energy to power the transportation sector. A more environmentally-friendly transportation sector will be critical in enabling these countries to transition towards sustainable economic growth trajectories.