Dynamic modelling of Renewable Energy Consumption and Production on African Economic Growth and the Environment Using Vector Error Correction Models

Abstract

Prior research has explored the influence of renewable consumption on economic growth and carbon emissions (CO2), but few studies have examined the impact of both renewable energy consumption (REC) and renewable energy production (REP) on economic growth and CO2 emissions in Africa. The objective of this work is to dynamically estimate the effects of both REC and REP on economic growth and CO2 emissions in Africa, based on empirical evidence and using a data set from the years 1965 to 2020. This research aims to determine how REC and REP affect the economies and ecosystems of Africa. The Error Correction Models (ECMs) were utilized in the analysis, focusing on howREP and REC influence economic growth and environmental carbon dioxide emissions (CO2). Vector Error Correction Models (VECM) and Johansen cointegration methods were used on the data set. The results demonstrated that economic forces existed between the variables and that there was a long run equilibrium relationship between GDP and CO2 emissions in Africa, from REC to REP. Additionally, the outcomes showed that both REC and REP slowed down environmental deterioration while promoting economic growth. Africa can lower the negative impacts of environmental pollution caused by the consumption of nonrenewable energy sources by adopting and aggressively promoting renewable energy production and utilization.