The prominence of renewable and non-renewable electricity generation on the environmental Kuznets curve: A case study of Ethiopia

Ethiopia is one of the fastest growing economies in Africa. During the last three decades, it has been thriving with stupendous efforts for a transition from non-renewable energy use to a renewable energy-dominant economy. It is against this background that this study attempts to highlight the role of renewable energy and non-renewable energy in affecting CO2 emissions under an augmented EKC framework. To achieve this goal, the study exploits data for the period 1981-2015. The Autoregressive Distributed Lag (ARDL) model is employed and the results surprisingly revealed that both renewable and non-renewable energy use reduce Ethiopia's CO2 emissions. The unexpected inhibiting effect of nonrenewable energy on CO2 emissions might be attributed to the fact that share of non-renewable energy in the overall energy mix of Ethiopia has become insignificant after experiencing decline consistently during the last three decades. The outcome supports the existence of the EKC hypothesis as well as a N-shaped pattern of association between real GDP per capita and CO2 emissions per capita, particularly in the long run. There is evidence for long run causality, especially from the explanatory variables to CO2 emissions per capita. Policy implications are discussed. (C) 2020 Elsevier Ltd. All rights reserved.