Asymmetric effect of renewable energy consumption and economic growth on environmental degradation in sub-Saharan Africa

Abstract

Purpose While there are enormous studies on the determinants of environmental degradation, empirical studies on the effect of renewable energy consumption and economic growth on the environment remain limited. The purpose of this paper is to examine the asymmetric effect of renewable energy consumption and economic growth on environmental degradation in 31 selected sub-Saharan African countries spanning from 1990 to 2018. Design/methodology/approach To examine possible asymmetric effects of the exogenous variables on environmental degradation, we used the panel nonlinear autoregressive distributed lag approach and secondary data was sourced from the World Bank (2021). Findings The cointegration test results suggest that there is a long-run cointegration among the variables whereas our main findings indicate that environmental degradation responds asymmetrically to changes in renewable energy consumption and economic growth. The results further reveal that both positive and negative shocks in renewable energy consumption reduce environmental degradation. On the other hand, positive and negative shocks in economic growth increase environmental degradation in the long run. Research limitations/implications The implications of this study include the need for policymakers in sub-Saharan Africa to encourage the utilization of renewable energy as it reduces environmental degradation. Also, governments in the subregion should gradually replace the usage of fossil fuels by adapting renewable energy sources so as to achieve higher economic growth. Originality/value The positive and negative shocks of renewable energy consumption and economic growth on environmental degradation are examined to ascertain their asymmetric relationships.