Climate crisis and carbon accounting in West Africa: Institutional and financial dimensions
DOI:
https://doi.org/10.61511/srsd.v2i2.2025.1977Keywords:
accounting, carbon, climate, crisis, depthAbstract
Background: Climate change poses pressing challenges for developing regions, yet its impact on carbon accounting remains underexplored in West Africa. This study examines the effect of the climate crisis on carbon accounting practices across 14 West African countries, with attention to the mediating role of institutional capacity and the moderating role of financial sector depth. Method: Using a quantitative design, the study draws on panel data from the World Development Indicators (WDI) and Worldwide Governance Indicators (WGI) for 2005–2020. Carbon accounting practices were proxied by carbon dioxide damage as a percentage of Gross National Income (GNI), while climate crisis was measured by CO₂ emissions per capita. Estimation employed Fixed Effects regression models, with mediation and moderation tested through the Baron and Kenny (1986) framework and interaction term analysis in STATA. Findings: Results reveal that the climate crisis significantly promotes carbon accounting practices. Institutional capacity partially mediates this relationship, as regulatory frameworks improve under climate stress but are weakened by systemic reporting flaws. Financial sector depth independently enhances carbon accounting yet dampens the direct influence of climate pressures, confirming a moderating effect. Conclusion: The findings suggest that climate-induced pressures alone are insufficient without strong institutions and financial systems that prioritize environmental concerns. Policymakers should therefore strengthen regulatory capacity, enforcement mechanisms, and institutional independence to ensure environmental regulations yield meaningful accounting reforms. The study is limited by reliance on secondary data and proxy measures, which may not capture qualitative institutional nuances. The exclusion of The Gambia also constrains generalizability. Future research should explore firm-level practices and assess the effects of green finance and environmental taxation on disclosure. Novelty/ originality of this article: The study introduces an integrative framework linking institutional and financial dynamics to climate–accounting interactions, offering both conceptual and methodological contributions in a West African context.
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Copyright (c) 2025 Zakaria Abubakari, Samuel Namoog, Redruth Nyaaba Ayimpoya
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