Determinants of renewable energy consumption in agrarian Sub-Sahara African economies

Festus Victor Bekun,Andrew Adewale Alola

doi:10.1007/s40974-022-00243-8

Abstract

The effect of ecological distortions and climate change issues have been at the forefront of the minds of policymakers and energy practitioners in recent decades. This concern is associated with the vision of the seventh and thirteenth Sustainable Development Goals that are centered on access to clean energy sources and mitigating climate change issues, as detailed in Vision 2030. To this end, the present study uses Pesaran’s Pooled Mean Group Auto Regressive Distributed Lag model to investigate the determinants of clean/non-conventional energy in the case of Sub-Saharan Africa. The empirical results show that a 1% increase in economic activity increases the level of renewable energy consumption by 0.128% in the short run. In the long-run, economic growth dampens the consumption of renewable energy by 0.402% over the investigated period. The reason for this peculiar result for the Sub-Saharan African economies could be attributed to the prevalent demand for conventional energy sources and the cost-related factor associated with clean energy technologies even when the economy (herein measured by Gross Domestic Product) is improving. Furthermore, the effect of energy (electricity from fossil fuel) also shows a statistically significant impact when trying to reduce the clean energy consumption. This arises from an expected trade-off effect. Regarding the causality analysis using the heterogeneous panel, the causality results present a one-way causality running from economic growth to renewable energy consumption. We also found there to be a feedback causality relationship between urbanization and renewable energy as well as agricultural value added and economic growth. Based on these findings, several policy decisions were prescribed for Sub-Saharan African economies such as the diversification of Sub-Saharan African economies energy to more renewable energy sources and the adoption of clean energy technologies that are reputed to be cleaner and environmentally friendly.

Highlights

Renewable energy has continued to retain the spotlight in every climate change debate because solar, wind, hydroelectric, biomass, and thermal power areF
This concern is associated with the vision of the seventh and thirteenth Sustainable Development Goals that are centered on access to clean energy sources and mitigating climate change issues, as detailed in Vision 2030
The reason for this peculiar result for the SubSaharan African economies could be attributed to the prevalent demand for conventional energy sources and the cost-related factor associated with clean energy technologies even when the economy is improving

Summary

Introduction

Renewable energy has continued to retain the spotlight in every climate change debate because solar, wind, hydroelectric, biomass, and thermal power areF. In light of the attribution of the climate change concern with the growing environmental damage globally, policy frameworks that are designed for energy portfolio diversification are being adopted by intergovernmental agencies, governments, and other stakeholders. This further affirms the report that there is a 95% certainty that human activities, especially from the burning of hydrocarbon fuels (conventional energy) such as coal and fossil oil among others, are largely responsible for the global warming issues (National Aeronautics and Space Administration 2020). Considering how climate change is not the only reason that gears the development of renewable energy, there have been consistent debates on the impact of other factors such as the oil and natural gas price, carbon emission certificate vis-a-vis carbon pricing, and financial and economic activities (Aguirre and Ibikunle 2014; Rafiq et al 2014; Alola and Alola 2018; Ozturk and Dincer 2020; Tugcu et al 2020; Alola and Saint Akadiri 2021)

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Results

Conclusion