Tubman Talks with Dr. Elvis Dze Achuo: Energy Consumption and Environmental Degradation in Africa

Abstract:
Although the question of environmental sustainability has attracted unprecedented interest among academics, policymakers and practitioners in recent years, the debate whether renewable or non-renewable energy consumption enhances or impedes environmental sustainability remains far from being settled. Thus, this study empirically examines the effects of fossil fuel and renewable energy consumption on environmental degradation in Africa over the 1996-2020 period. The study employs the ordinary least squares (OLS), system generalised method of moments (SGMM) and Driscoll-Kraay robust standard errors estimators. Results of these econometric techniques show that energy consumption (both fossil fuel and renewable energy) increases greenhouse gas (GHG) emissions, thereby impeding environmental sustainability. These results are robust across various regional economic blocs and income groups but for Upper-middle-income countries and the Economic Community of Central African States (ECCAS) where energy consumption is environment-enhancing. Furthermore, as regards transmission mechanisms, the results show that the environmental impacts of fossil fuel consumption are modulated through financial development and ICT adoption, leading to respective positive net effects of 0.04460796 and 0.07682873. This is up to respective policy threshold levels of 203.265 and 137.105 of financial development and ICT when the positive net effects are nullified. Contingent on these findings, it is imperative for African countries to develop sound financial systems and encourage the use of green technologies. However, policymakers should also be aware of the critical levels of financial development and ICT, beyond which complementary policies are required for non-renewable energy consumption to maintain a negative impact on environmental degradation.

Biography:
Elvis Achuo holds a PhD in mathematical economics from the University of Dschang, Cameroon. His research interests are in the domains of development and environmental economics, resource and energy economics, and institutional economics. His works in these areas have been published in leading international journals, including Resources Policy, Environmental Science and Pollution Research, Energy Reports, and African Development Review.