Climate crisis and carbon accounting in West Africa: Institutional and financial dimensions

Background: This study investigates the effect of the climate crisis on carbon accounting practices across 14 West African countries, with particular focus on the mediating role of institutional capacity and the moderating role of financial sector depth. Method: The study employed a quantitative research design using secondary panel data collected from the World Development Indicators (WDI) and Worldwide Governance Indicators (WGI) for the period 2005–2020. Carbon accounting practices were proxied by carbon dioxide damage as a percentage of Gross National Income (GNI), while the climate crisis was measured using CO₂ emissions per capita. Fixed Effects regression models were employed for estimation. Additionally, mediation and moderation analyses were conducted using the Baron and Kenny (1986) framework and interaction term testing, respectively, with estimations run in STATA. Findings: The results indicate a significant and positive relationship between climate crisis and carbon accounting practices. Institutional capacity was found to partially mediate this relationship, with regulatory quality improving in response to climate stress but paradoxically correlating with lower carbon damage reporting. Conclusion: Financial sector depth independently enhanced carbon accounting but significantly weakened the direct effect of the climate crisis, confirming a moderating influence. The findings suggest that while climate-induced pressure promotes carbon accounting practices, its effectiveness is conditioned by institutional and financial structures. Novelty/ originality of this article: This study introduces a novel integrative framework that examines how both institutional and financial system characteristics simultaneously influence the effectiveness of carbon accounting responses to the climate crisis, an area that remains underexplored in the West African context. Furthermore, the application of panel mediation and moderation analysis within this context offers an innovative methodological contribution.