The role of exogenous technological factors and renewable energy in carbon dioxide emission reduction in Sub-Saharan Africa

Abstract

There is global consensus that an increase in atmospheric greenhouse gas emissions, particularly carbon dioxide (CO2) emissions, is driving climate change. To deal with this issue, governments all around the world have committed to controlling greenhouse gas emissions. For developing economies like Sub–Saharan Africa (SSA), studies have suggested adopting low-carbon technologies from developed countries while at the same time exploiting their vast renewable energy resources to reduce CO2 emissions. Particularly, from a developing economy perspective, we note little knowledge exists empirically on the role of technological factors in carbon dioxide emissions. This study contributes to this gap by exploring the effects of various exogenous technological factors [measured in terms of machinery and equipment imports, stock of foreign machinery research and development (R&D) spillovers, foreign direct investment (FDI)] and renewable energy on CO2 emissions, employing data from 18 countries in SSA between 1995 and 2017 and the dynamic specific common correlated effect estimator (DCCE) technique. The findings reveal that both machinery imports and renewable energy usage reduce carbon dioxide emissions significantly, but the effect of the latter is larger. Although FDI shows CO2 emission reducing effect, it is less pronounced. However, foreign R&D increases carbon dioxide emissions in the region. Further robustness checks confirm these results. These results suggest that important synergies exist among SDG13, SDG 7 and SDG 9. We discuss the policy implications.