Environmental Protection Expenditure and Air Pollution in Developing Countries: Evidence from a Generalised Method of Moments (GMM) Approach

Defined as the amount of money spent on all necessary activities directly aimed at the prevention, elimination and reduction of nuisances or pollution resulting from the production processes (or consumption of goods and services), environmental protection expenditure is often expected to depict the efforts being made to prohibit, prevent and eliminate pollution resulting from the production of goods and services. This study examines the influence of environmental protection expenditure on air pollution in developing countries using the Generalised Method of Moments (GMM) Approach from 2015 to 2025. As a comprehensive approach, the study included urbanisation and foreign direct investment (FDI) as control variables. The findings revealed an insignificant relationship between environmental protection expenditure and air pollution within the SADC. Urbanisation was negatively related to air pollution. This is because urbanisation reduced the per capita emissions in the SADC; however, as it expands rapidly, it creates air pollution. FDI had a positive effect on air pollution in the SADC. The study therefore recommends implementing region-wide vehicle emission standards, accelerating the transition to renewable energy, and enforcing stricter industrial pollution regulations to improve environmental sustainability.