Climate Change, Government Agricultural Expenditure, and Agricultural Growth Nexus in Afghanistan: An Investigation with FMOLS and DOLS Approaches

Abstract

Agriculture is one of the main providers to Afghanistan’s economy. Since 2002, the government, in collaboration with donor organizations and the private sector, has undertaken various projects in the agricultural industry. However, a notable upsurge in atmospheric CO2 emissions has resulted in significant climate change influences in contemporary decades. Therefore, this article examines the causal association between climate change, government agricultural expenditure, and agricultural growth in Afghanistan from 2002 to 2020. Despite evidence that climate change may be a primary driver of Afghanistan’s agricultural production decline, no specific studies have addressed this matter comprehensively. This article’s empirical investigation reveals a negative association between CO2 emissions and agricultural production, indicating that rising emissions are linked to decreased agricultural output, subsequently impacting Afghanistan’s agricultural growth. Both theoretical considerations and empirical findings highlight the importance of adopting clean and green energy solutions and technologies to mitigate pollution in Afghanistan. Furthermore, the research underscores that the impacts of carbon dioxide emissions on agriculture production exhibit robust long-term dynamics, contributing to the heterogeneity of the findings. Additionally, the study establishes a positive correlation between government agricultural expenditure and agricultural production. Consequently, it is strongly recommended that the Afghan government take proactive initiatives to enhance the agricultural sector. This can be accomplished by allocating more financial resources and implementing projects that promise long-term benefits for the country’s agricultural development.