Revisiting the Growth–Environment Nexus in South Africa: Short-Term and Long-Term Evidence from an ARDL-Based EKC Model with Trade Openness and Energy Intensity

This study investigates the relationship between economic growth, trade openness, energy intensity, and carbon dioxide (CO2) emissions in South Africa within the Environmental Kuznets Curve (EKC) framework over the period 1970–2022. Using quarterly time series data and the Autoregressive Distributed Lag (ARDL) modelling approach, the study examines both the short-term and long-term dynamics between economic activity and environmental degradation. Descriptive statistics, correlation analysis, unit root tests, ARDL bounds testing, error-correction modelling, Granger causality analysis, and diagnostic tests were employed to ensure robust empirical results. The Augmented Dickey–Fuller (ADF) and Phillips–Perron (PP) tests indicate that all variables are integrated of order one, I(1), thereby satisfying the conditions for ARDL estimation. The ARDL bounds test confirms the existence of a long-term cointegrating relationship among carbon emissions, economic growth, trade openness, and energy intensity. The long-term results reveal a statistically significant negative coefficient for economic growth and a positive coefficient for the squared income term, indicating a U-shaped relationship between income and carbon emissions. Consequently, the conventional Environmental Kuznets Curve hypothesis is not supported for South Africa. The findings suggest that economic growth initially reduces environmental degradation; however, beyond a certain income threshold, further economic expansion increases carbon emissions. Trade openness and energy intensity exert positive and statistically significant effects on carbon emissions in the long run, implying that increased integration into global markets and continued dependence on energy-intensive production contribute to environmental degradation. The Error-Correction Model (ECM) reveals a negative and highly significant adjustment coefficient (−0.928), indicating that approximately 92.8% of short-term disequilibrium is corrected within one period. Granger causality results further show a unidirectional causal relationship running from trade openness to carbon emissions, while no significant causal relationship is found between economic growth and carbon emissions. The study concludes that economic growth alone is insufficient to achieve environmental sustainability in South Africa. Policy efforts should therefore focus on promoting renewable energy adoption, improving energy efficiency, strengthening environmental regulations, encouraging cleaner production technologies, and integrating environmental considerations into trade and industrial policies. These measures are essential for achieving sustainable economic development while meeting national climate-change-mitigation objectives.