Governance and renewable energy consumption in sub-Saharan Africa

Asongu, Simplice and Odhiambo, Nicholas (2021): Governance and renewable energy consumption in sub-Saharan Africa. Forthcoming in: International Journal of Energy Sector Management

Abstract

The purpose of this study is to assess the nexus between governance and renewable energy consumption in sub-Saharan Africa. The focus is on 44 countries in Sub-Saharan Africa with data from 1996 to 2016. The empirical evidence is based on Tobit regressions. It is apparent from the findings that political and institutional governance are negatively related to the consumption of renewable energy in the sampled countries. The unexpected findings are clarified and policy implications are discussed in the light of sustainable development goals. This study extends the extant literature by assessing how political governance (consisting of political stability and “voice & accountability”) and institutional governance (entailing the rule of law and corruption-control) affect the consumption of renewable energy in sub-Saharan Africa.

• Item Type: MPRA Paper
• Language: English
• Keywords: Renewable energy; Governance; Sub-Saharan Africa; Sustainable development
• Subjects: H - Public Economics > H1 - Structure and Scope of Government > H10 - General; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation > Q20 - General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q30 - General

References

Abdulqadir, I. A. (2020). “Growth threshold-effect on renewable energy consumption in major oil-producing countries in sub-Saharan Africa: a dynamic panel threshold regression estimation”. International Journal of Energy Sector Management. DOI: 10.1108/IJESM-04-2020-0004

Acheampong, A.O., Adams, S., & Boateng, E., (2019). “Do globalization and renewable energy contribute to carbon emissions mitigation in Sub-Saharan Africa?”Science of the Total Environment, 677, pp. 436-446.

Adams, S., & Nsiah, C., (2019). “Reducing carbon dioxide emissions; Does renewable energy matter?”, Science of the Total Environment, 693(November), 133288.

Adesola S., & Brennan F. (2019).“Introduction to Energy in Africa: Policy, Management, and Sustainability”. In: Adesola S., Brennan F. (eds) Energy in Africa. Palgrave Macmillan, Cham.

Ajide, K. B, & Raheem, I. D., (2016a). “Institutions-FDI Nexus in ECOWAS Countries”, Journal of African Business, 17(3), pp. 319-341.

Ajide, K. B, & Raheem, I. D., (2016b). “The Institutional Quality Impact on Remittances in the ECOWAS Sub-Region”, African Development Review, 28(4), pp. 462–481.

Ajide, K. B., Raheem, I. D., & Asongu, S. A., (2019). “Dollarization and the “Unbundling” of Globalization in sub-Saharan Africa”, Research in International Business and Finance, 47 (January), pp. 398-409.

Akinyemi, O., Efobi, U., Osabuohien, E., & Alege, P., (2019). “Regional Integration and Energy Sustainability in Africa: Exploring the Challenges and Prospects for ECOWAS”, African Development Review, 31(4), pp. 517-528.

Andrés, R. A., Asongu, S. A., & Amavilah, V. H., (2015). “The Impact of Formal Institutions on Knowledge Economy”. Journal of the Knowledge Economy, 6(4), pp. 1034-1062.

Ariss, R. T., (2010). “On the Implications of Market Power in Banking: Evidence from Developing Countries”, Journal of Banking and Finance, 34(4), pp. 765-775.

Asongu, S. A., El Montasser, G., & Toumi, H., (2016). “Testing the relationships between energy consumption, CO2 emissions, and economic growth in 24 African countries: a panel ARDL approach”. Environmental Science and Pollution Research, 23(7), pp. 6563–6573.

Asongu, S. A., Iheonu, C.O. & Odo, K. O., (2019). “The conditional relationship between renewable energy and environmental quality in sub-Saharan Africa”, Environmental Science and Pollution Research, 26, pp. 36993–37000.

Asongu, S. A., & Odhiambo, N. M., (2019). “Inclusive development in environmental sustainability in sub‐ Saharan Africa: Insights from governance mechanisms”, Sustainable Development.27(4), pp. 713-724.

Asongu, S. A., & Odhiambo, N. M., (2021). “Enhancing Governance for Environmental Sustainability in Sub-Saharan Africa”, Energy Exploration & Exploitation, 39(1),pp. 444-463.

Bah, M. M., Abdulwakil, M. M., & Azam, M., (2020). “Income heterogeneity and the Environmental Kuznets Curve hypothesis in Sub-Saharan African countries”, Geojournal, 85, pp. 617–628.

Bekun, F. V., Emir, F., & Sakordie, S. A., (2019). “Another look at the relationship between energy consumption, carbon dioxide emissions, and economic growth in South Africa”, Science of the Total Environment, 655(2019), pp. 759-765.

Breitung, J., (2000). The local power of some unit root tests for panel data. Advances in Econometrics, Volume 15: Nonstationary Panels, Panel Cointegration, and Dynamic Panels, ed. B. H. Baltagi, 161–178. Amsterdam: JAY Press.

Breitung, J., & Das, S., (2005). “Panel unit root tests under cross-sectional dependence”, StatisticaNeerlandica 59(4), pp. 414–433.

Carson, R. T., & Sun, Y., (2007).“The Tobit model with a non-zero threshold”, Econometrics Journal, 10(3), pp. 488-502.

Chemutai, B. (2009).“Achieving Effective National Environmental Governance in Africa”, I SS Today. Available at: https://issafrica.org/iss-today/achieving-effective-national-environmental-governance-in-africa(accessed 07 April 2017).

Choi, I. (2001). “Unit root tests for panel data”. Journal of International Money and Finance, 20(2), pp. 249-272.

Coccorese, P., & Pellecchia, A., (2010). “Testing the ‘Quiet Life’ Hypothesis in the Italian Banking Industry”, Economic Notes by BancadeiPaschi di Siena SpA, 39(3), pp. 173-202.

Chen, H., Hao, Y., Li, J., & Song, X., (2018). “The impact of environmental regulation, shadow economy, and corruption on environmental quality: Theory and empirical evidence from China”, Journal of Cleaner Production, 195(10), pp. 200-214.

Deng, Y., Wu, Y., & Xu, H., (2020). “Political Connections and Firm Pollution Behaviour: An Empirical Study”, Environmental and Resource Economics, 75, pp. 867–898.

Emmelin L., & Lerman P. (2008). Environmental Quality Standards as a Tool in Environmental Governance — the Case of Sweden. In: Schmidt M., Glasson J., Emmelin L., Helbron H. (eds) Standards and Thresholds for Impact Assessment. Environmental Protection in the European Union, vol 3. Springer, Berlin, Heidelberg.

Fan, Z.Y. & Zhao, R.J., (2019).“Does Rule of Law Promote Pollution Control? Evidence from the Establishment of the Environmental Court”. Economic Research Journal, 54, pp.21-37.

Giannakouros, P., & Chen, L., (2018). “A problem-solving approach to data analysis for economics”, Forum for Social Economics, 47(1), pp. 87-114.

Hadri, K. (2000). “Testing for stationarity in heterogeneous panel data”. Econometrics Journal, 3(2), pp. 148–161.

Han C., Zhang W., & Shan S. (2019). Regulatory Governance, Public Appeal, and Environmental Pollution. In: He D., Wang C. (eds) A New Era. Palgrave Macmillan, Singapore.

Harris, R. D. F., & Tzavalis, E., (1999). “Inference for unit roots in dynamic panels where the time dimension is fixed”. Journal of Econometrics, 91(2), pp. 201–226.

IRENA (2010) “Prospects for the African Power Section”. International Renewable Energy Agency. Available at: https://www.irena.org/documentdownloads/publications/prospects_for_the_african_powersector.pdf(accessed 03 December 2018).

Im, K. S., M. H. Pesaran, M. H., & Shin, Y., (2003). “Testing for unit roots in heterogeneous panels”. Journal of Econometrics, 115(1), pp. 53–74.

Jarrett, M. B., (2017).“Lights out: poor governance and Africa's energy crisis”. The Africa Report. Available at: http://www.theafricareport.com/News-Analysis/lights-out-africas.html(accessed 01 December 2018).

Jerven, M., (2015). Africa: Why Economists Get It Wrong, African Arguments, Zed Books, London.

Jones, K. R., (2003).“Multilateral Environmental Agreements in Africa: Efforts and Problems in Implementation”. International Environmental Agreements, 3(2), pp. 97-135.

Joshua, U., & Alola, A. A., (2020). “Accounting for environmental sustainability from coal-led growth in South Africa: the role of employment and FDI”, Environmental Science and Pollution Research, 27, pp. 17706–17716.

Joshua, U., Bekun, F. V., & Sakordie, S. A., (2020). “New insight into the causal linkage between economic expansion, FDI, coal consumption, pollutant emissions and urbanization in South Africa”, Environmental Science and Pollution Research, 27, pp. 18013–18024.

Knill, C., Debus, M., & Heichel, S. (2010). “Do parties matter in internationalised policy areas? The impact of political parties on environmental policy outputs in 18 OECD countries, 1970-2000”. European Journal of Political Research, 49(3), pp. 301-336.

Koetter, M., & Vins, O., (2008). “The Quiet Life Hypothesis in Banking-Evidence from German Savings Banks”, Department of Finance, Goethe University, Working Paper Series: Finance and Accounting No. 190, Frankfurt.

Kou, G., Chao, X., Peng, Y., & Alsaadi, F. E., (2019a). “Machine learning methods combined with financial systemic risk”. Technological and Economic Development of Economy, DOI: https://doi.org/10.3846/tede.2019.8740(accessed 01 December 2019).

Kou, G., Yang, P., Xiao, F., Chen, Y., & Alsaadi, F. E., (2019b). “Evaluation of feature selection methods for text classification with small datasets using multiple criteria decision-making methods”. Applied Soft Computing, DOI: https://doi.org/10.1016/j.asoc.2019.105836. (accessed 01 December 2019).

Kou, G., Ergu, D., Chen, Y., & Lin, C., (2016). “Pairwise comparison matrix in multiple criteria decision making”. Technological and Economic Development of Economy, 22(5), pp. 738-765.

Kou, G., Lu, Y., Peng, Y., & Shi, Y., (2012). “Evaluation of Classification Algorithms using MCDM and Rank Correlation”. International Journal of Information Technology & Decision Making, 11(1), pp. 197-225.

Kou, G., Peng, Y., & Wang, G., (2014). “Evaluation of clustering algorithms for financial risk analysis using MCDM methods”. Information Sciences, 275(August), pp. 1-12.

Kuada, J., & Mensah, E.,(2020). “Knowledge transfer in the emerging solar energy sector in Ghana.” Contemporary Social Science, 15(1), pp. 82-97.

Kumbhakar, S. C., & Lovell, C. A. K., (2000).Stochastic Frontier Analysis, Cambridge MA: Cambridge University Press.

Kurian M., & Ardakanian R. (2015). The Nexus Approach to Governance of Environmental Resources Considering Global Change. In: Kurian M., Ardakanian R. (eds) Governing the Nexus. Springer, Cham.

Layachi, O. B., (2019). “Effects of Energy Prices on Environmental Pollution: Testing Environmental Kuznets Curve for Algeria”, International Journal of Energy Economics and Policy, 9(5), pp. 401-408.

Levin, A., Lin, C.-F., & Chu, C.-S. J., (2002). “Unit root tests in panel data: Asymptotic and finite-sample properties”. Journal of Econometrics, 108(1), pp. 1–24.

Magazzino, C., Bekun, F. V., Etokakpan, M. U., & Uzuner, G., (2020). “Modeling the dynamic Nexus among coal consumption, pollutant emissions and real income: empirical evidence from South Africa”, Environmental Science and Pollution Research, 27, pp. 8772–8782.

Masud, M.A.K., Nurunnabi, M. & Bae, S.M. (2018). “The effects of corporate governance on environmental sustainability reporting: empirical evidence from South Asian countries”. Asian Journal of Sustainability and Social Responsibility, 3(3), pp. 1-26.

Mbah, P. O., & Nzeadibe, T. C., (2016).“Inclusive municipal solid waste management policy in Nigeria: engaging the informal economy in post-2015 development agenda”. Local Environment. The International Journal of Justice and Sustainability, 22(2), pp. 203-224.

Nathaniel, S.P., & Iheonu, C.O. (2019). “CO2 abatement in Africa: The role of renewable and non-renewable energy consumption”. Science of the Total Environment, 679, 337-345.

Nathaniel, S. P., & Bekun, F. V., (2020). “Electricity Consumption, Urbanization and Economic Growth in Nigeria: New Insights from Combined Cointegration amidst Structural Breaks”, Journal of Public Affairs.DOI: 10.1002/pa.2102.

Nwokora, Z., & Pelizzo, R., (2018). “Measuring Party System Change: A Systems Perspective”, Political Studies, 66(1), pp. 100-118.

Pelizzo, R., Araral, E., Pak, A., & Xun, W., (2016). “Determinants of Bribery: Theory and Evidence from Sub‐ Saharan Africa”, African Development Review, 28(2), pp. 229-240.

Pelizzo, R., & Nwokora, Z., (2016). “Bridging the Divide: Measuring Party System Change and Classifying Party Systems”, Politics & Policy, 44(6), pp. 1017-1052.

Pelizzo, R., & Nwokora, Z., (2018). “Party System Change and the Quality of Democracy in East Africa”, Politics & Policy, 46(3), pp. 505-528.

Shurig, S., (2015).“Who will fund the renewable solution to the energy crisis?”theguardian, Available at: http://www.theguardian.com/global-development-professionals-network/2014/jun/05/renewable-energy-electricty-africa-policy(accessed 08 September 2015).

Sinha, A., Gupta, M., Shahbaz, M., & Sengupta, T., (2019). “Impact of corruption in public sector on environmental quality: Implications for sustainability in BRICS and next 11 countries”, Journal of Cleaner Production, 232(September), pp. 1379-1393.

Tchamyou, V. S., (2017). “The role of knowledge economy in African business”, Journal of the Knowledge Economy, 8(4), pp. 1189–1228.

Tchamyou, V. S., (2020). “Education, Lifelong learning, Inequality and Financial access: Evidence from African countries”. Contemporary Social Science, 15(1), pp. 7-25.

Tchamyou, V. S., (2019).“The Role of Information Sharing in Modulating the Effect of Financial Access on Inequality”. Journal of African Business, 20(3), pp. 317-338.

Tchamyou, V. S., Erreygers, G., &Cassimon, D., (2019). “Inequality, ICT and Financial Access in Africa”, Technological Forecasting and Social Change, 139 (February), pp. 169- 184.

The Economist (2017). “Electrification in Africa: More Africans have electricity, but they are using less of it”, Middle East and Africa Dec 14th 2017 editionhttps://www.economist.com/middle-east-and-africa/2017/12/14/more-africans-have-electricity-but-they-are-using-less-of-it (Accessed: 19/03/2020).

Tobin, J., (1958). “Estimation of relationships for limited dependent variables”.Econometrica 26(1), pp. 24-36.

Wang, J., & Dong, K., (2019). “What drives environmental degradation? Evidence from 14 Sub-Saharan African countries”, Science of the Total Environment, 656( March), pp.165-173.

Warren, R., Price, J., VanDerWal, J., & Sohl, H., (2018).“The implications of the United Nations Paris Agreement on climate change for globally significant biodiversity areas”. Climatic Change, 147, 395–409.

Wen, J., Hao, Y., Feng, G.-F., & Chang, C.-P. (2016). “Does government ideology influence environmental performance? Evidence based on a new dataset”. Economic Systems, 40(2), pp. 232-246.