Socioeconomic determinants of CO 2 emissions in Somalia: evidence from an ARDL analysis

This study examines the socioeconomic determinants of CO2 emissions in Somalia using annual time-series data from 1990 to 2022. The study investigates the effects of GDP per capita, foreign direct investment (FDI), income inequality measured by the Gini coefficient, and population growth on CO2 emissions, addressing the limited empirical evidence on environmental dynamics in fragile and post-conflict economies. The study applies the Autoregressive Distributed Lag (ARDL) bounds testing approach to examine both short- and long-run relationships among the variables. The unit root test results confirm mixed orders of integration, I(0) and I(1), supporting the suitability of the ARDL framework. The bounds testing results confirm the existence of a long-run equilibrium relationship among variables. The long-run estimation results show that GDP per capita and population growth have positive and statistically significant effects on CO2 emissions, indicating that economic expansion and demographic growth increase environmental pressure in Somalia. In contrast, FDI and income inequality have negative and statistically significant relationships with CO2 emissions. However, these findings are interpreted cautiously because the model does not directly capture the sectoral composition of FDI or household-level energy consumption patterns. The error correction model confirms adjustment toward long-run equilibrium after short-run deviations. The study does not directly test the Environmental Kuznets Curve (EKC) hypothesis because the model does not include a nonlinear income specification. The findings highlight the importance of renewable energy development, energy efficiency improvements, environmentally responsible investment, and sustainable resource management to support Somalia’s economic development while reducing environmental pressures.