Does Development Reduce Deforestation? Testing the Environmental Kuznets Curve in Ghana and Côte d’Ivoire’s Cocoa Economies
Open Access DepositedGhana and Côte d’Ivoire together supply over 60% of the world’s cocoa and have experienced severe forest loss, with cocoa cultivation responsible for more than 60% of agriculturally driven forest loss since 2000. While the Environmental Kuznets Curve (EKC) hypothesis predicts that income growth will eventually reduce environmental degradation, its applicability to commodity-dependent economies at both national and sub-national scales remains underexplored. This study applies the EKC framework to the cocoa sector, testing whether an inverted U-shaped relationship exists between income, cocoa export dependency, and tree cover loss in Ghana and Côte d’Ivoire between 2001 and 2023. At the national level, an Autoregressive Distributed Lag (ARDL) model with Granger causality tests is estimated using GDP per capita and cocoa export share as key variables. At the sub-national level, panel fixed effects models are estimated across 16 Ghanaian and 14 Ivorian administrative regions. The EKC hypothesis is not supported at the national level for either country
reducing the demand for new farmland through intensification and livelihood diversification in Ghana, and governing the forest frontier directly in Côte d’Ivoire.
Ghana exhibits a U-shaped rather than inverted-U trajectory, while Côte d’Ivoire shows no statistically significant income-deforestation relationship. Cocoa export dependency is positively associated with tree cover loss in both countries. Granger causality analysis reveals that tree cover loss in Ghana is demand-driven, with income and exports predicting deforestation, while in Côte d’Ivoire deforestation precedes export expansion, consistent with a supply-driven forest rent dynamic. These divergent causal structures imply differentiated policy responses
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