Climate change, governance and economic growth : the case of small island developing states

Abstract

The paper investigates the climate change, governance and development nexus for 19 small island developing states (SIDS) from 1995 to 2018. The study uses the Vector Error Correction Model and the results point out that climate change and environmental degradation deter economic growth. Governance has a positive and significant impact on economic growth across the selected SIDS. The findings also confirm a bi-directional causal link between economic growth and governance, and that increasing growth contributes to higher levels of pollution. Finally, governance has no statistically significant effect on environmental degradation. This is attributed to weak governance arrangements in small (and mainly island) states, which fail to have well defined goals and strategies in the climate change sector. There is thus a need to administer policies, programmes, legal instruments, reforms and institutional interventions in a holistic and coordinated manner among and within various institutions across SIDS to build a proper governance structure to curb the impacts of climate change.