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The nexus between renewable energy consumption, environmental pollution, and socio-economic variables in Africa: An econometric approach

Owusu, Phebe Asantewaa
This thesis explores the nexus between renewable energy consumption, the environment, the society and the economy in Africa. Twenty-one African countries are studied for the period of 1990 – 2013. This thesis tries to achieve two things: first, to examine the validity of the environmental Kuznets curve (EKC) hypothesis for Africa controlling for renewable energy usage, and second, to ascertain the effects of some economic and societal variables on renewable energy consumption. The results of the study rejected the EKC hypothesis with environmental pollution (measured by carbon dioxide emissions per capita) as the dependent variable. When environmental degradation (measured by ecological footprint vs biocapacity, EFC) is the dependent variable, it invalidates the EKC hypothesis. GDP per capita appears to decline environmental degradation in the long-term. The second analysis investigated the effects of societal (Human Development Index, HDI, and Institutional quality) and economic factors (Foreign Direct Investment, Trade openness and GDP per capita) on renewable energy consumption. The findings showed that a higher HDI reduces renewable energy consumption. A decrease is observed in renewable energy usage with an increase in GDP per capita while foreign direct investment increases its usage. Good institutional quality has no significant impact on renewable energy usage. The findings are discussed in the light of the review of the energy mix of the 21 selected African countries.