Ecological footprint, urbanization, and energy consumption in South Africa: including the excluded.

Abstract

The study explores the relationship between ecological footprint, urbanization, and energy consumption by applying the ARDL estimation technique on data spanning 1965-2014 for South Africa. After applying the unit root test that accounts for a break in the data, the Bayer and Hanck (J Time Ser Anal 34:83-95, 2013) combined cointegration test affirms cointegrating relationship among the variables. Findings further reveal that economic growth and financial development exact a deteriorating impact on the environment in the short run. However, the same was not true for both energy use and urbanization. While urbanization and energy use promote environmental quality in the long run, financial development and economic growth degrade it further. The long-run findings of our study are confirmed to be robust as reported by the fully modified OLS (FMOLS), dynamic OLS (DOLS), and the canonical cointegrating regression (CCR) estimates. The direction of causality supports the energy-led growth hypothesis for South Africa. Policy outcomes and directions, and the possibility of promoting sustainable growth without degrading the environment are discussed.