Electricity Consumption–Economic Growth–CO2 Emissions Nexus in Sub‐Saharan Africa: Evidence from Panel Cointegration

Abstract

AbstractThis study explores the causal relationship among electricity consumption, economic growth and CO2 emissions for a group of 14 sub‐Sahara African (SSA) countries from 1980 to 2009 using panel cointegration and panel vector error correction modelling methods. The findings demonstrate that in the long run electricity consumption has a statistically significant positive impact on CO2 emissions. The results also reveal that the inverted U‐shaped Environmental Kuznets Curve (EKC) hypothesis exists in the SSA countries' case. The panel causality tests indicate that there is short‐run unidirectional causality running from economic growth to CO2 emissions and electricity consumption respectively. Simultaneously, there is long‐run bidirectional causality between electricity consumption and economic growth, electricity consumption and CO2 emissions, economic growth and CO2 emissions. Depending on the results, relevant policies can be initiated without negatively affecting economic growth.