Determinants of renewable energy production in WAEMU countries: New empirical insights and policy implications

ABSTRACT

This paper introduces model uncertainty into the empirical study of the determinants of renewable energy generation at the regional level. The Bayesian Model Averaging (BMA) approach applied to the panel data of West African Economic and Monetary Union (WAEMU) countries, spanning the period of 1990–2017. The results suggest that, among the considered regressors, those reflecting countries’ socioeconomic and financial conditions as well as internal environmental prospects tend to receive high posterior inclusion probabilities. Then, the study explores the relationship between these regressors and renewable energy production by employing the Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) long-run estimators. The findings reveal that renewable energy consumption, real GDP per capita, investment in energy, urbanization, and unemployment spur renewable energy production, whereas CO₂ emissions and energy imports inhibit renewable energy production. Findings from this study have important policy implications for WAEMU countries with regard to achieving the 7th objective of the Sustainable Development Goals (SDGs), which advocates the access to affordable, reliable, sustainable, and modern energy for all.

KEYWORDS:

• Bayesian model averaging
• panel data
• renewable energy supply
• energy policy
• West Africa

Acknowledgments

The corresponding author would like to thank the United Nations Economic Commission for Africa (UNECA) for the use of their facilities at the beginning of this research paper as a Research Fellow with the Macroeconomic Policy Division (MPD). He would also like to thank the Central Bank of West African States (BCEAO) for the use of their facilities during the completion of this paper as an Economic Programs Officer at the BCEAO. The authors would like to thank Research Fellows’ team at the UNECA for their insightful comments. However, the views expressed are those of the authors and do not represent that of the BCEAO nor the United Nations (UN). Thanks to Muazu Ibrahim, Esther Opeyemi Akinyemi (UNECA, Ethiopia), Jacques-Patrick Arnold Yao, and Ehouman Williams Venance Ahouakan (BCEAO, Senegal) for their comments. Finally, the authors are very grateful to the anonymous reviewers and the Editor-in-Chief of the International Journal of Green Energy, whose comments have improved this paper.

Declaration of interest statement

Authors wish to confirm that there are no known conflicts of interest associated with this publication.

Notes

¹ West African Economic and Monetary Union (WAEMU) is a West African organization created on January 10, 1994, whose mission is to achieve the economic integration of the member States, by strengthening the competitiveness of economic activities in the West African region. It includes the following countries: Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo.

² For the parsimony of the model, we shorten the abbreviation of the variables as follows: ren_enerp = REP, ren_enerc = REC, rgdpc = RGDPC, inv_ener = INVE, urb_pop = URB, CO₂ _emis = CO₂, ener_imp = EIMP and un_lab = UN.

Additional information

Funding

This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.