The dynamic linkage between renewable energy consumption and environmental sustainability in Sub-Saharan African countries: Heterogeneous macro-panel data analysis

Abstract

Environmental sustainability is a pivotal facet of sustainable development, captivating the attention of development researchers. Within this context, energy consumption emerges as a pivotal determinant influencing environmental sustainability variations among countries. This study delves into the linkages between renewable energy consumption and environmental sustainability within 30 Sub-Saharan African countries, utilising panel data from 2000 to 2020. It contributes to the expanding literature on this subject by considering the impacts of institutional and political factors while addressing challenges related to cross-sectional dependence, heterogeneity, and serial correlation through robust estimation. To this end, the Augmented Mean Group Model was used in the empirical estimation. The study reveals a noteworthy 67.32% mean score for renewable energy consumption in the total final energy consumption across the sampled countries, a positive deviation from the global average of 11.2%. Empirical results signify a positive and statistically significant long-term relationship between renewable energy consumption and environmental sustainability. Nevertheless, the inclusion of a policy dummy variable indicates a significant increase in greenhouse gas emissions post the Millennium Development Goals period. Granger non-causality test results reveal a bidirectional causality between renewable energy consumption and environmental sustainability. Thus, subsidies and tax exemptions for renewable energy production and consumption, as well as supporting sustainable development goals with appropriate environmental investment, are among the policy options that Sub-Saharan African countries and policymakers could pursue to achieve environmental sustainability and sustainable development goals.

Keywords:

• energy consumption
• environmental sustainability
• augmented mean group
• Granger causality
• Sub-Saharan Africa

PUBLIC INTEREST STATEMENT

Despite commendable efforts, the pace of progress toward sustainable development remains insufficient, with persisting issues like negative environmental impacts, climatic catastrophes, biodiversity loss, pollution, and social tensions. Turning our attention to Sub-Saharan Africa, we recognize it as a diverse continent blessed with abundant natural and human resources, holding immense potential for fostering inclusive growth and eradicating poverty. However, the looming threat of climate change poses significant challenges, potentially impacting millions in this region. Meaningful climate and development solutions are imperative, and this statement underscores the pivotal role of energy consumption. While energy is a catalyst for economic growth, its excessive use contributes to environmental degradation. Our research investigates the dynamic linkage between renewable energy consumption and environmental sustainability in Sub-Saharan African countries from 2000 to 2020. Our overarching goal is to provide evidence-based insights crucial for well-informed and effective policymaking. Through our research, we aspire to contribute to driving sustainable development in Sub-Saharan Africa, aligning with global agendas, and fostering a resilient, equitable, and environmentally conscious future for the region. We believe that by understanding the intricate dynamics between renewable energy consumption and environmental sustainability, we can pave the way for informed decisions that positively impact the region’s trajectory.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

All the data used for this study is openly available in the World Development Indicators data set, at https://data.worldbank.org/, except for the data on institutional quality, which is from the World Governance Indicators data set available at https://databank.worldbank.org/source/worldwide-governance-indicators/.

Additional information

Notes on contributors

Mulugeta Bekele

Mulugeta Bekele is a PhD Scholar in Agricultural Economics at Haramaya University, Ethiopia. His areas of research interest includes macro-economic analysis, natural resource economics studies, livelihood analysis, and environmental valuation, among others.

Maria Sassi

Maria Sassi (Ph.D.) is a Professor at the Department of Economics and Management, University of Pavia. She contributed to various international research projects focused on food security issues in Sub-Saharan Africa and published articles on economic and health determinants of child nutritional status, the impact of climate change on the cereal market and food security, commodity food prices, and food price volatility.

Kedir Jemal

Kedir Jemal (PhD) is an Assistant Professor of Agricultural Economics at Haramaya University. His research interests include livelihood analysis, impact analysis, and poverty analysis, among others.

Beyan Ahmed

Beyan Ahmed (PhD) is an Assistant Professor of Agricultural Economics at Haramaya University. His research interests include livelihood analysis, impact analysis, and poverty analysis, among others.