Trade and Climate Change: Impacts and Interactions

Abstract

The relationship between international trade, the environment, and climate change is examined in further detail in this study. Kenya, the biggest exporter in East Africa, is vulnerable to climate change. The current analysis, which takes into account Kenya's economy for the years 1993–2023, is based on the straightforward ordinary least square method to determine the significant relationship between trade and climate change. Temperatures are used in the study as climate change indicators. To provide a thorough examination of the dynamics of climate change, the research takes into account several aspects, including trade indicators, carbon emissions, industrialization, and urbanization. It was found that export positively and significantly affects climate change in Kenya. The positive impact of imports on climate change is negligible. The study finds evidence of a bidirectional causal relationship between trade and climate change using multivariate Granger causality tests. According to the result, sustainable production methods should be promoted, renewable energy should be encouraged, and fair-trade policies that put environmental responsibility first should be implemented.