Investigating the moderating role of economic policy uncertainty in environmental Kuznets curve for South Africa: Evidence from the novel dynamic ARDL simulations approach

Abstract

South Africa, one of the emerging markets and fast-developing economies in Sub-Saharan Africa recognised for varying world’s natural assets on the international market, has recorded significant economic growth in the previous several years. However, aside from the ecological repercussions of energy generation, how economic uncertainties moderate the effects of energy intensity, renewable and non-renewable energy usage, and economic complexity on the environment has largely gone unnoticed. As a result, this paper addresses an important empirical vacuum by exploring the moderating influence of economic policy uncertainty in the environmental Kuznets curve for South Africa from 1960 to 2020. Results from the novel dynamic autoregressive distributed lag simulations framework reveal the following key findings: (i) economic policy uncertainty accelerates environmental degradation in both the short and long run; (ii) economic growth (as measured by the scale effect) increases environmental degradation, whereas the square of economic growth (as measured by the technique effect) slows it down, confirming the presence of the environmental Kuznets curve (EKC) hypothesis; (iii) environmental quality is deteriorated by energy intensity, economic complexity, non-renewable energy usage, and trade openness; (iv) the use of renewable energy and technological innovation increase environmental quality; (v) whereas the moderating effects of economic policy uncertainty on the environmental impacts of energy intensity, renewable and non-renewable energy consumption result in an increase in environmental destruction, its moderating effect on environmental implication of economic complexity plays an important role in improving environmental quality. These findings permit us to draw important policy recommendations for South Africa for improving environmental quality.

The asymmetric effect of technological innovation on CO2 emissions in South Africa: New evidence from the QARDL approach

“…Unparalleled threats to growth and human existence are shown by climate change brought on by greenhouse gas emissions (GHGs), primarily carbon dioxide (CO 2 ) pollution. These risks include extreme weather, the extinction of species, and a food crisis (Bales and Sovacool, 2021;Udeagha and Ngepah, 2022a). The main human activity that contributes to CO 2 emissions is the combustion of fossil fuels (coal and natural gas) for transportation and energy.…”

“…However, some manufacturing processes and alterations to land usage still result in CO 2 emissions. Extreme weather occurrences, such as floods, heatwaves, storms, droughts, rising sea levels, disruptions to water systems, and stunted plant growth are just a few of the many possible health, physical, and ecological repercussions of climate change and global warming (Udeagha and Muchapondwa, 2022). A nation may endure environmental deterioration as a result of the enormous cost of saving endangered species and cleaning up landfills, which might have detrimental economic repercussions.…”

“…Additionally, the sustainable development goals (7, 8, 9, 12, and 13) established by the United Nations, which must be achieved by the year 2030, emphasize the urgent need for solutions to combat climate change, including affordable clean energy, sustainable economic growth, technological innovation, sustainable consumption, and production (Wang et al, 2022a). As a result, many nations now place a high priority on lowering carbon emissions, and the advancement of technology has also played an important role in promoting changes to the direction of global economic development (Udeagha and Ngepah, 2022b). It is recognized that the idea of technological innovation is a factor that may reduce energy consumption, cut pollutant emissions, enhance environmental quality, and encourage the growth of a greener economy .…”

Revisiting the impact of energy consumption, foreign direct investment, and geopolitical risk on CO2 emissions: Comparing developed and developing countries

“…We can infer that a rise in ECN will upsurge emissions. Recently, Udeagha and Muchapondwa (2022) conclude that economic uncertainty acts as a moderator among ECN, ECG, and EMS in South Africa. Next, Udeagha and Ngepah (2019), , and Udeagha and Ngepah (2021a) noted that trade affects both ECG and EMS across the short-and long-run.…”

“…Next, Udeagha and Ngepah (2019), , and Udeagha and Ngepah (2021a) noted that trade affects both ECG and EMS across the short-and long-run. Similarly, Udeagha and Ngepah (2021b) investigate whether disaggregated energy has a heterogeneous impact on EMS. The findings highlight that renewables mitigate EMS whereas non-renewables escalate it.…”