Measuring convergence of energy and emission efficiencies and technology inequality across African countries

Abstract

In the fight against global climate change, improving energy efficiency and reducing related emissions are critical to mitigating sustainability issues such as global warming. In this regard, technological progress is known to improve energy efficiency and reduce related emissions. However, previous sustainability studies on Africa have paid less attention to energy and emission efficiency convergence among countries, along with the contribution of technological progress to the continent's sustainability. Accordingly, this paper develops a novel framework that assesses energy and emission efficiency convergence, gauges technology inequality, identifies the barriers to technology diffusion, and explores the factors influencing energy and emission efficiency convergence in Africa. The proposed framework incorporates Data Envelopment Analysis (DEA), several economic convergence concepts, a K-means clustering model, the concept of efficiency Gini coefficient, and a group-based inequality decomposition method. We empirically covered 39 African countries from 2006 to 2018. The results show that African countries are, on average, 71.1% energy efficient and 65.3% CO2 emission efficient, leaving more room for energy saving and emissions reduction. Second, there is strong evidence of convergence in energy and emission efficiencies in Africa. Third, despite the observed convergence process, there is significant heterogeneity between two research groups (i.e., low-and high-efficiency groups of countries) in terms of energy and emission efficiencies, with persistent technology inequality suggesting a lower contribution of environmental technological advancements to the continent's sustainability. Furthermore, cross-group inequality is the primary barrier to technology diffusion. Fourth, regional cooperation accelerates the convergence process in the two efficiency indicators. While economic development, industrial structure, and renewable energy consumption (REC) tend to favor energy and emission efficiency growth, rising foreign direct investment (FDI) and energy prices have a negative impact. Meanwhile, the effects of energy prices, FDI, and REC on emission efficiency are insignificant. Based on our findings, we discussed policy implications to promote energy and emission efficiency convergence and narrow environmental technology gaps.