Reducing carbon emissions: The role of renewable energy and democracy

Abstract

Abstract The global economy continues to witness a consistent increase in carbon emissions, making it difficult to achieve the Paris agreement on climate change. To inform policies to mitigate carbon emissions, it is crucial to understand the factors that influence it. While there is a vast literature on the impact of economic growth on carbon emissions, empirical research on the impact of democracy and renewable energy on environmental quality in developing countries remains limited. Therefore, the goal of this paper was to examine the impact of democracy and renewable energy on carbon emissions for 46 sub-Saharan African countries using unbalanced data for the period of 1980–2015. Using an instrumental variable generalised-method of the moment, the study found that democracy and renewable energy reduce carbon emissions. Additionally, foreign direct investment, trade openness, population, and economic growth were the forces behind carbon emissions in sub-Saharan Africa. However, when democracy is accounted for, economic growth turns to reduce carbon emissions. No evidence of Environmental Kuznets curve was found. The results further indicated that the impact of urbanization on carbon emissions is indeterminate. These results are robust when alternative econometric estimation techniques were used. The study further demonstrated that the level of economic development matters when assessing the impact of these variables on carbon emissions. The study, therefore, recommends that democracy and investment in renewable energy should be given priority on Africa agenda to mitigate climate change.