South Asian Journal of Social Studies and Economics

Forest products have become an integral component of China-Africa trade engagement.  However, with increasingly global climate change warnings and the need to turn down the heat below the pre-industrial level, understanding the trade-off from forest trade in relation to CO2 emissions is paramount in shaping forest product trade sustainability in the long run. This study, therefore, tests the haven and halo hypothesis based on the FMOL technique by analyzing China-FOCAC forest products trade engagements. A balanced panel data of 20 FOCAC members were selected based on availability and consistency from 2000-2014. The variables; forest products trade (exports value), GDP per capita, FDI inflow, institutional quality, energy use and carbon emissions were gleaned from the world bank and the United Nations database. The descriptive statistics results reveal a disparity in economic growth, FDI inflow and value of forest products exports among FOCAC members. Per the FMOL estimation results, the China-FOCAC forest products trade has an insignificant impact on the level of carbon emissions in the selected countries which contributes to the ongoing debate on whether Africa is a pollution haven for China. Nevertheless, Per capita GDP and energy use are significant drivers of emissions whereas FDI’s and the quality of institutions have shown high potential for transforming the quality of the environment in the selected countries. These results are paramount in shaping existing and future forest trade agreements.