Towards the cost of health in Africa: examining the synergistic effect of climate change and renewable energy on health expenditure

Abstract

AbstractClimate change has become the centre of discussion among scholars and practitioners globally. This is believed to have severe consequences for the environment and human health, leading to significant implications for health financing. However, empirical investigations examining the climate change-health nexus remain scarce and underexplored. Hence, this study contributes to knowledge by exploring the direct and synergistic influence of renewable energy and climate change on health expenditure (i.e., national, public, private and external) in Africa. The study employs annual data from a panel of 47 African countries between 2006 and 2019, which are estimated using the generalised method of moments. Robustness checks are performed using alternative proxies for climate change and the Driscoll-Kraay estimation technique. The empirical outcomes reveal that high CO2 emissions increase the various indices of health expenditure, implying environmental degradation triggers higher costs in health spending. The empirical results further show that renewable energy presents a negative and significant influence on health expenditure, showing that health expenditure decreases due to the adoption of renewable energy. Additionally, the study finds that renewable energy weakens the effect of carbon emissions on health spending, including public, private and external health expenditures. This implies that the severe impact of climate change on health expenditure is reduced through the intervening role of renewable energy sources. The study recommends that policymakers implement targeted policies towards reducing carbon emissions and increasing renewable energy consumption to improve health outcomes. Governments must also promote universal health coverage to ensure inclusive coverage as climate change becomes increasingly apparent.