Assessing the roles of green innovations and renewables in environmental sustainability of resource‐rich Sub‐Saharan African states: A financial development perspective

Abstract

AbstractEnvironmental literature keeps expanding on the natural resources‐environmental sustainability conundrum. However, most studies examine this conundrum in different geographical locations other than resource‐rich Sub‐Saharan African (SSA) countries while also neglecting the criticality of issues like green innovations, financial development, and renewable energy. Besides, the likelihood of a nonlinear relationship has often been jettisoned in the framework. Thus, the resources‐sustainability nexus was examined in the SSA using robust econometric techniques, while underscoring the roles of green innovations, renewable energy, and financial development. Using the cross‐sectional augmented auto‐regressive distributed lag (CS‐ARDL), cross‐sectional augmented distributed lag (CS‐DL), and the common correlated effect mean group (CCEMG) approaches that conciliate with residual cross‐sectional dependence and heterogeneity amongst others, we discovered that (i) the natural resources‐sustainability nexus is nonlinear in SSA. (ii) unlike the environmental gains from green innovations and renewables in the SSA, natural resource harms their environmental sustainability (iii) the interaction between financial development and natural resources worsened the ecosystem of the countries (iv) the interaction between natural resources and the duo of green innovations and renewable energy enhances SSA's ecological quality (v) urbanization damage environmental sustainability by spurring ecological footprints. Furthermore, one‐way causality paths were observed from the trio of natural resources, financial development, and green innovations to ecological footprints. But renewable energy and urbanization had a feedback causal relationship with ecological footprints. The findings are robust to CO2 emissions as an alternative environmental quality measure. Policy implications to foster SDGs‐related pollution mitigation agenda were thereafter extensively discussed for the SSA.