The Role of Agriculture in Environmental Degradation: Implications for Developing Countries

Author: Abdul Qadeer

Abstract

This study examines the factors influencing environmental degradation in developing countries from 1990 to 2020, with a particular focus on the role of income using panel data analysis. A set of environmental degradation indicators is utilized to assess the impact. The panel unit root test indicates that all external sector variables are non-stationary in their original series but become stationary at first difference, except for ecological footprint and carbon dioxide emissions. The Pedroni Cointegration test confirms the existence of a long-term relationship between the dependent and independent variables. The study employs Pooled Mean Group (PMG), Mean Group (MG), and Augmented Mean Group (AMG) models. The PMG model results indicate that net national income and agricultural production significantly increase ecological footprint, contributing to environmental degradation. The interaction term, which is statistically significant, highlights the role of income with environmental degradation and agricultural production. The findings highlight that higher income levels significantly impact the environment, however an increase in renewable energy usage, industrial value-added, and carbon dioxide emissions influence environment negatively. Hence, the government need to adopt income enhancing and environment friendly policies.