One district one factory policy of Ghana, a transition to a low‑carbon habitable economy?
One district one factory policy of Ghana, a transition to a low‑carbon habitable economy?
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Date
2020-01
Authors
Mensah, Nyarko Claudia
Boamah, Kofi Baah
Dauda, Lamini
Salman, Muhammad
Journal Title
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Publisher
Environment, Development and Sustainability
Abstract
Ghana has proposed ‘One district, one factory’ policy which would bridge the income
gap, improve standards of living, ease dependency ratio, and build up the economy. Based
on the past trend of foreign direct investment (FDI) of Ghana, we examine the possible
impact of this policy on its environment, validating the pollution haven or halo efect. We
examined the validity of the environmental Kuznets curve (EKC) hypothesis. Augmented
Dickey–Fuller and Phillips–Peron unit root tests were conducted to examine the presence
of unit root among the variables. Johansen cointegration test was also used to examine
the long-run relationship. The autoregressive distributed lag approach to cointegration,
Granger causality test, and fully modifed ordinary least square were the estimation meth ods employed. A unidirectional relationship was found between FDI and economic growth,
FDI and energy consumption, and FDI and CO2 emissions. We found that the EKC was not
valid for Ghana, but the pollution haven hypothesis was confrmed for Ghana. We therefore
conclude that ‘One district one factory’ policy would only be benefcial if Ghana attracts
cleaner industries, environmental regulations get much stringent, and environmentally
related taxes are elevated
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Citation
Mensah, C. N., Dauda, L., Boamah, K. B., & Salman, M. (2021). One district one factory policy of Ghana, a transition to a low-carbon habitable economy?. Environment, Development and Sustainability, 23, 703-721.