The Impact of Environmental Governance and Economic Growth on Environmental Quality (CO₂ Emissions) in Ethiopia

This study investigates the impact of environmental governance and economic growth on Environmental quality (CO₂ emissions) in Ethiopia, specifically testing the validity of the Environmental Kuznets Curve (EKC) hypothesis. Utilizing a 28-year longitudinal dataset (1996–2023), the research employs an Augmented Dickey-Fuller (ADF) framework for stationarity diagnostics and an Ordinary Least Squares (OLS) model supplemented by Huber-White robust standard errors to mitigate heteroscedasticity (p < 0.01). The results reveal a statistically significant inverted U-shaped trajectory (lnGDP, β = 26.64; lnGDP ² , β ² = -2.07; p < 0.001). The empirical analysis identifies a critical turning point at a log-income threshold of 6.42, signaling the onset of relative decoupling. Furthermore, while governance indicators remained statistically neutral, industrialization was found to exert a significant positive pressure on emissions (β = 1.05), suggesting that sectoral composition remains a primary barrier to environmental recovery. These findings imply that policy interventions should transition from general growth facilitation to targeted industrial decarbonization to accelerate the downward slope of the EKC.