The Conditional Relationship Between Renewable Energy and Environmental Quality in Sub-Saharan Africa

Abstract

This paper complements existing literature by assessing the conditional relationship between renewable energy and environmental quality in a sample of 40 African countries for the period 2002 to 2017. The empirical evidence is based on fixed effects regressions and quantile fixed effects regressions. The findings from both estimation techniques show that renewable energy consistently decreases carbon dioxide (CO 2) emissions. Moreover, the negative effect is a decreasing function of CO 2 emissions or the negative effect of renewable energy on CO 2 emissions decreases with increasing levels of CO 2 emissions. In other words, countries with higher levels of CO 2 emissions consistently experience a less negative effect compared to their counterparts with lower levels of CO 2 emissions. Policy implications are discussed.

Inequality, finance and renewable energy consumption in Sub-Saharan Africa

“…(iii) The Palma ratio mirrors the share of national income of the top 10% of households against the bottom 40%. The adopted dependent variable from WDI is renewable energy consumption (% of total final energy consumption), in accordance with the extant environmental sustainability literature (Nathaniel & Iheonu, 2019;Asongu et al, 2019; while financial development from the FDSD is proxied with financial access in terms of "private domestic credit by domestic banks and other financial institutions". This measurement of financial development which is qualified as financial system activity or credit by the FDSD is consistent with the problem statement of this study because the conception and definition of financial system activity encompass both the formal and non-formal financial sectors (which entail the majority of the poor).…”

“…Concerns of environmental degradation and shortage of energy are most apparent in developing countries, especially countries located south of the Saharan desert (i.e. SSA countries) because of inter alia, the sub-region is characterized by energy grid systems that are some of the worst in the world (Jarrett, 2017;Asongu, Iheonu & Odo, 2019). Moreover, the attendant literature has also documented that the sub-region would be worst hit by the consequences of climate change (Asongu & Odhiambo, 2020a, 2020b.…”

Testing the nexus between renewable energy consumption and environmental quality in Nigeria: The role of broad‐based financial development

“…Sarkodie and Strezov (2019), Charfeddine (2017) and Al‐Mulali, Saboori, and Ozturk (2015) demonstrate that energy consumption from non‐renewable sources contributes to the problem of increased CO 2 emission and deteriorates environmental quality. This position is supported by the positive link between economic growth and fossil energy consumption, which suggests that economic expansion translates into higher energy consumption and, consequently, higher carbon emissions (Aboagye, 2017; Asongu, Iheonu, & Odo, 2019; Iorember et al, 2019; Usman, Olanipekun, Iorember, & Goodman, 2020).…”

The effect of finance on inequality in Sub-Saharan Africa: avoidable CO2 emissions thresholds

“…Second, the consequences of environmental degradation have been documented to be the most detrimental in SSA owing to a plethora of reasons, including (i) most of the worst systems of electricity grid in the world are located in the sub-region (Asongu, Iheonu & Odo, 2019;Jarrett, 2017) and (ii) the unfavorable ramifications of climate change would be the most disastrous in SSA according to Odhiambo (2020a, 2020b). In the light of the attendant literature, an illustration that is worthwhile in putting the highlighted concerns into perspective is the fact that the production of electricity in the sub-region is almost equivalent to that produced by a single state in the United States of America (USA) such as New York.…”