Renewable energy and environmental quality: A second-generation panel evidence from the Sub Saharan Africa (SSA) countries

Abstract

This study employs dynamic panel data for 34 Sub Saharan Africa (SSA) countries for the period 1984–2016 to estimate the effects of renewable energy on environmental quality measured by three indicators, namely, per capita CO2 emissions, energy intensity (EI) and Aggregate National Savings (ANS). The study leveraged a battery of second-generation econometric tests and estimation and causality methods to obtain the coefficients between the regressed and the regressors. Results reveal that use of renewable energy reduces CO2 emissions and energy intensity while it enhances ANS. Economic growth still seems to be expensive for the region as it stimulates CO2 emissions. However, it has a positive effect on ANS. As expected, fossil fuels exacerbate CO2 emissions and energy intensity. FDI is found to be detrimental for the environment of SSA region with its positive significant coefficient on CO2 emissions. Financial development is reported to reduce CO2 emissions. Some causal links between variables are also noted