Analysis of the Effect of Sector Value added to GDP on Carbon Emissions in Kenya
Main Article Content
Keywords
Carbon emissions, GDP, sector value-added, NARDL, ADF, PP, unit root, Kenya
Abstract
This study examines the asymmetric effect of sectoral value added to GDP on carbon dioxide (CO₂) emissions in Kenya over the period 1990–2021, grounded in the Environmental Kuznets Curve (EKC) theoretical framework. Despite existence of enormous literature examining the linkage between economic growth and carbon emissions, only a few have focused on how growth in different sectors contribute to the establishment of this nexus. Using annual time series data from World Banks’ World Development Indicators database, the study applies the Augmented Dickey-Fuller and Phillips-Perron unit root tests, the Nonlinear Autoregressive Distributed Lag (NARDL) model and Wald tests for asymmetry. The variables considered include carbon emissions as the dependent variable and renewable energy, agriculture value added to GDP, service value added to GDP and industry value added to GDP as the independent variables. The unit root test results under Augmented Dickey Fuller and Philips-Perron indicate that the variables were first difference stationary. The bounds test results confirm the existence of a long-run cointegrating relationship at the 5% significance level, with an error correction term of −0.904. The NARDL results indicate that in the long-run, agriculture value added growth significantly increases CO₂ emissions (+2.734) whereas it’s decline leads to a reduction in emissions (coef. -1.800 p=0.077) in. The service sector growth reduces emissions (−0.213) while it’s decline increases emissions (0.594). Industrial growth on the other hand is associated with lower emissions (−0.727), whereas its decline substantially raises emissions (+5.486). Renewable energy consumption consistently reduces emissions both in the short and long run (-3.755 and -5.036 respectively). Wald tests confirm a strong and significant long-run asymmetry in the service and industrial sectors with agriculture presenting a weak long-run asymmetry (p=0.092). The findings suggest that sectoral composition critically shapes Kenya's emissions trajectory and that policy interventions must distinguish between growth and decline phases. Short-term agricultural policies should prioritize climate-smart farming and sustainable land-use practices, while service sector strategies should emphasize green public transport and digital economy expansion. The anomalous industrial result warrants further investigation with additional controls for fossil fuel energy consumption and structural breaks.
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References
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Aug 2, 2026
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Keror , S. J., Nyangweso , P. M., & Mose , J. I. (2026). Analysis of the Effect of Sector Value added to GDP on Carbon Emissions in Kenya. Journal of Aquatic and Terrestrial Ecosystems, 4(2), 63–90. https://doi.org/10.69897/jatems.v4i2.384
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Author Biographies
Sharon Jebiwot Keror , Department of Agricultural Economics and Resource Management, School of Agriculture and Natural Resources, Moi University, P.O. BOX 3900-30100 Eldoret, Kenya
Department of Agricultural Economics and Resource Management,
School of Agriculture and Natural Resources, Moi University,
P.O. BOX 3900-30100 Eldoret, Kenya
Philip Mulama Nyangweso , Department of Agricultural Economics and Resource Management, School of Agriculture and Natural Resources, Moi University, P.O. BOX 3900-30100 Eldoret, Kenya
Department of Agricultural Economics and Resource Management,
School of Agriculture and Natural Resources, Moi University,
P.O. BOX 3900-30100 Eldoret, Kenya
Jared Isaboke Mose , Department of Agricultural Economics and Resource Management, School of Agriculture and Natural Resources, Moi University, P.O. BOX 3900-30100 Eldoret, Kenya
Department of Agricultural Economics and Resource Management,
School of Agriculture and Natural Resources, Moi University,
P.O. BOX 3900-30100 Eldoret, Kenya