Trade openness, energy dependence, and the carbon emissions gap in developing economies: a CS-ARDL and CCEMG analysis

Globalization has redefined carbon responsibility, allowing emissions generated in one region to support consumption elsewhere while obscuring environmental accountability under territorial accounting. This study examines how trade openness, energy dependence, and institutional quality shape carbon emissions in developing economies. Using an unbalanced panel of 30 low-emission countries across Sub-Saharan Africa and Southeast Asia from 1996–2022, emissions are disaggregated into production-based emissions, consumption-based emissions, and the carbon gap. Employing Cross-Sectionally Augmented Autoregressive Distributed Lag (CS-ARDL) and Common Correlated Effects Mean Group (CCEMG) estimators, the study examines short- and long-run dynamics. Trade openness significantly increases production-based emissions (0.042, p < 0.05), consumption-based emissions (0.074, p < 0.01), and the carbon gap (0.032, p < 0.10), while net energy imports increase consumption-based emissions (0.081, p < 0.01). Trade openness and energy dependence jointly amplify emissions outsourcing, whereas institutional quality and renewable energy adoption reduce emissions burdens. Sub-Saharan Africa exhibits greater exposure to imported emissions than Southeast Asia. The findings demonstrate that territorial accounting understates environmental responsibility and support integrating consumption-based accounting into sustainability metrics, carbon-border policies, and SDG monitoring to strengthen equitable environmental accountability.