The positive impact of official development assistance (ODA) on renewable energy development: Evidence from 34 Sub-Saharan Africa Countries

Abstract

Appropriate use of official development assistance (ODA) to promote the renewable energy development levels in developing countries requires a better understanding of the effects of ODA on the renewable energy development in developing countries. Given this purpose, the panel threshold regression model was established to explore the effects of ODA and the renewable energy development in 34 Sub-Saharan African (SSA) countries. This model takes carbon dioxide intensity and urbanization as threshold variables to analyze the impact of ODA on the renewable energy development from the perspective of technological progress (carbon dioxide intensity) and social structure change (urbanization). The results show a non-linear relationship between the ODA and the renewable energy development, indicating that the threshold effect does exist. When carbon dioxide intensity and urbanization are lower than the threshold values, the ODA would promote the renewable energy development. This mean that ODA contributes to the renewable energy development in the early stages of technical progress and social structural change. However, when the carbon dioxide intensity and urbanization exceed the threshold values, the effect of ODA on renewable energy development was negative. This indicates that the ODA does not always promote the renewable energy development. On the contrary, when technological progress and social structure change develop to a certain stage, the ODA would hinder the renewable energy development. In order to better use the ODA to promote the renewable energy, the factors of technological progress and social structure change should be considered more carefully.