The role of renewable energy and agriculture in reducing CO2 emissions: Evidence for North Africa countries

Abstract

This paper uses panel cointegration techniques and Granger causality tests to investigate the dynamic causal links between per capita renewable energy consumption, agricultural value added (AVA), carbon dioxide (CO2) emissions, and real gross domestic product (GDP) for a panel of five North Africa countries spanning the period 1980–2011. In the short-run, Granger causality tests show the existence of bidirectional causality between CO2 emissions and agriculture; a unidirectional causality running from agriculture to GDP, from GDP to renewable energy consumption, and from renewable energy consumption to agriculture. In the long-run, there is bidirectional causality between agriculture and CO2 emissions; a unidirectional causality running from renewable energy to agriculture and to emissions, and from output to agriculture and to emissions. Long-run parameter estimates show that an increase in GDP or in renewable energy consumption (including combustible and waste) increases CO2 emissions, whereas an increase in agricultural value added reduces CO2 emissions. As policy recommendation, North African authorities should encourage renewable energy consumption, and especially clean renewable energy such as solar or wind, as this improves agricultural production and help to combat global warming.