4.5 Article

Renewable energy consumption a panacea for Sustainable economic growth: panel causality analysis for African blocs

Journal

INTERNATIONAL JOURNAL OF GREEN ENERGY
Volume 19, Issue 8, Pages 847-856

Publisher

TAYLOR & FRANCIS INC
DOI: 10.1080/15435075.2021.1966793

Keywords

Renewable energy consumption; economic growth; carbon reduction; environmental sustainability; emerging economies; ccemg; panel econometrics

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The study found that in Sub-Saharan Africa, increased renewable energy consumption may lead to a slowdown in economic growth, with specific effects varying across geographical locations. While the growth hypothesis is supported for East and West Africa, the feedback hypothesis is validated only for Central Africa.
The issue of increased renewable energy consumption has been widely debated, and this has become a central energy policy concern for developing and developed countries. The existing literature provides evidence that there is a positive relationship between energy consumption and economic growth in developed economies. However, findings in respect of developing/emerging economies remain inconclusive. Thus, this paper aims to investigate the impact on renewable energy consumption on economic growth by controlling other macroeconomic variables for regions of Sub-Saharan Africa (East, Central and West) covering the 1990-2018 sample period. For this purpose, common correlated effects mean group estimator (CCEMG) and Dumitrescu-Hurlin Granger causality test approach are used to consider both cross-sectional dependency and cross-country heterogeneity across countries. The CCEMG result indicates that an increase in renewable energy consumption led to reduction in economic growth even when the sample is analyzed based on geographical locations as East, West, and Central Africa. Granger causality results validate the feedback hypothesis for only Central Africa; the growth hypothesis is supported for East and West Africa. The empirical results suggest that energy planners, governments, and policy makers must act together to increase the renewable energy consumption share in her energy mix to promote economic growth for regions of Sub-Saharan Africa.

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