Disaggregating the environmental effects of renewable and non-renewable energy consumption in South Africa: fresh evidence from the novel dynamic ARDL simulations approach
About: This article is published in Economics of Planning.The article was published on 2021-11-24 and is currently open access. It has received 35 citations till now. The article focuses on the topics: Renewable energy & Consumption (economics).
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TL;DR: In this paper , the authors explored the moderating influence of economic policy uncertainty in the environmental Kuznets curve for South Africa from 1960 to 2020, and found that economic uncertainty accelerates environmental degradation in both the short and long run.
Abstract: South Africa, one of the emerging markets and fast-developing economies in Sub-Saharan Africa recognised for varying world’s natural assets on the international market, has recorded significant economic growth in the previous several years. However, aside from the ecological repercussions of energy generation, how economic uncertainties moderate the effects of energy intensity, renewable and non-renewable energy usage, and economic complexity on the environment has largely gone unnoticed. As a result, this paper addresses an important empirical vacuum by exploring the moderating influence of economic policy uncertainty in the environmental Kuznets curve for South Africa from 1960 to 2020. Results from the novel dynamic autoregressive distributed lag simulations framework reveal the following key findings: (i) economic policy uncertainty accelerates environmental degradation in both the short and long run; (ii) economic growth (as measured by the scale effect) increases environmental degradation, whereas the square of economic growth (as measured by the technique effect) slows it down, confirming the presence of the environmental Kuznets curve (EKC) hypothesis; (iii) environmental quality is deteriorated by energy intensity, economic complexity, non-renewable energy usage, and trade openness; (iv) the use of renewable energy and technological innovation increase environmental quality; (v) whereas the moderating effects of economic policy uncertainty on the environmental impacts of energy intensity, renewable and non-renewable energy consumption result in an increase in environmental destruction, its moderating effect on environmental implication of economic complexity plays an important role in improving environmental quality. These findings permit us to draw important policy recommendations for South Africa for improving environmental quality.
28 citations
TL;DR: In this article , the effect of green technological innovation (GI), trade openness (OPEN), population size (POP), per capita GDP (GDP), per-capable GDP squared, institutional quality (INS), and energy consumption (EC) on carbon emissions (CO2) in South Africa is investigated.
Abstract: Fiscal decentralization and green innovation are important to a country’s economic progress, but the externalities of increased pollution as a result of a rise in the energy used and economic growth must not be overlooked. The destruction of the environment presents a serious threat to human existence. South Africa, like several nations, has been working on reducing its dependence on fossil fuels such as coal by utilizing modern energy-efficient technologies that allow to establish a more carbon-neutral economy. Several attempts have been made to identify the major sources of environmental deterioration. Within the Stochastic Impacts by Regression on Population, Affluence, and Technology (STIRPAT) framework from 1960 to 2020, this study aims to check empirically the effect of fiscal decentralization (FD), green technological innovation (GI), trade openness (OPEN), population size (POP), per capita GDP (GDP), per capita GDP squared (GDP2), institutional quality (INS), and energy consumption (EC) on carbon emissions (CO2) in South Africa, as given its fast economic progress the country is facing problems with CO2 emission. The recently developed novel dynamic autoregressive distributed lag (ARDL)-simulations framework has been used. The outcomes of the analysis indicate that (i) FD, GI, and INS improve environmental sustainability in both the short and long run; (ii) OPEN deteriorates environmental quality in the long run, although it is environmentally friendly in the short run; (iii) per capita GDP increases CO2 emissions, whereas its square contributes to lower it, thus validating the presence of an environmental Kuznets curve (EKC) hypothesis; (iii) POP and EC contribute to environmental deterioration in both the short and long run; and (iv) FD, GI, OPEN, POP, GDP, GDP2, INS, and EC Granger cause CO2 in the medium, long, and short run, suggesting that these variables are important to influence environmental sustainability. In light of our empirical evidence, this paper suggests that the international teamwork necessary to lessen carbon emissions is immensely critical to solve the growing trans-boundary environmental decay and other associated spillover consequences. Moreover, it is important to explain responsibilities at different tiers of government to effectively meet the objectives of low CO2 emissions and energy-saving fiscal expenditure functions.
25 citations
TL;DR: In this paper , the authors investigate the relationship between financial development and ecological sustainability and demonstrate that financial development boosts ecological integrity and environmental sustainability over the long and short terms. But, their empirical analysis is based on the novel dynamic autoregressive distributed lag simulations approach for South Africa between 1960 and 2020.
Abstract: Abstract The extant literature has produced mixed evidence on the relationship between financial development and ecological sustainability. This work addresses this conundrum by investigating financial development’s direct and indirect consequences on ecological quality utilizing the environmental Kuznets curve (EKC) methodological approach. Our empirical analysis is based on the novel dynamic autoregressive distributed lag simulations approach for South Africa between 1960 and 2020. The results, which used five distinct financial development measures, demonstrate that financial development boosts ecological integrity and environmental sustainability over the long and short terms. In the instance of South Africa, we additionally confirm the validity of the EKC theory. More importantly, the outcomes of the indirect channels demonstrate that financial development increases energy usage’s role in causing pollution while attenuating the detrimental impacts of economic growth, trade openness, and foreign direct investment on ecological quality. Moreover, the presence of an inadequate financial system is a requirement for the basis of the pollution haven hypothesis (PHH), which we examine using trade openness and foreign direct investment variables. PHH for both of these variables disappears when financial development crosses specified thresholds. Finally, industrial value addition destroys ecological quality while technological innovation enhances it. This research provides some crucial policy recommendations and fresh perspectives for South Africa as it develops national initiatives to support ecological sustainability and reach its net zero emissions goal.
19 citations
13 Sep 2022
TL;DR: In this article , the authors evaluate the combined influence of environmental innovation, and fiscal decentralization in order to achieve the environmental sustainability goals of the BRICS economies from 1970 to 2020.
Abstract: ABSTRACT Realizing carbon reduction goals is a top priority for many industrialized and developing nations worldwide. The biggest severe effect of human activities is climate change. Fiscal decentralization, and eco-innovation are possible strategies for addressing environmental issues and reaching sustainability objectives for the environment. These strategies may also assist nations and levels of government in pursuing perceived sustainable development. In order to achieve the environmental sustainability goals of the BRICS economies from 1970 to 2020, this study evaluates the combined influence of environmental innovation, and fiscal decentralization. Using the augmented mean group (AMG) method, the long-run dynamic equilibrium between the chosen variables is examined. The findings indicate that while the deployment of green technologies and renewable energy enhances green environment, fiscal decentralization, and economic growth aggravate ecological damage. Our evidence suggests that the BRICS countries should apply prudence when putting fiscal decentralization policies into place. To enhance ecological quality, authorities should promote the utilization of renewable energy sources and environmentally friendly technologies.
19 citations
References
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TL;DR: In this paper, the authors empirically examined the dynamic causal relationships between carbon emissions, energy consumption, income, and foreign trade in the case of Turkey using the time-series data for the period 1960-2005.
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TL;DR: In this paper, the effect of energy consumption and output on carbon emissions in the United States was investigated, and the Granger causality relationship between income, energy consumption, and carbon emissions, including labor and gross fixed capital formation, was investigated.
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TL;DR: In this article, the authors examined the linkages among economic growth, energy consumption, financial development, trade openness and CO2 emissions over the period of 1975Q1-2011Q4 in the case of Indonesia.
Abstract: This study examines the linkages among economic growth, energy consumption, financial development, trade openness and CO2 emissions over the period of 1975Q1-2011Q4 in the case of Indonesia. The stationary analysis is performed by using Zivot-Andrews structural break unit root test and the ARDL bounds testing approach for a long run relationship between the series in the presence of structural breaks. The causal relation between the concerned variable is examined by the VECM Granger causality technique and robustness of causal analysis is tested by innovative accounting approach (IAA). Our results confirm that the variables are cointegrated; it means that the long run relationship exists in the presence of structural break stemming in the series. The empirical findings indicate that economic growth and energy consumption increases CO2 emissions, while financial development and trade openness compact it. The VECM causality analysis has shown the feedback hypothesis between energy consumption and CO2 emissions. Economic growth and CO2 emissions are also interrelated i.e. bidirectional causality. Financial development Granger causes CO2 emissions. The study opens up a new policy insights to control the environment from degradation by using energy efficient technologies. Financial development and trade openness can also play their role in improving the environmental quality.
1,020 citations
TL;DR: It is affirmed that nonrenewable energy consumption and economic growth increase carbon emission flaring while renewable energy consumption declines CO2 emissions, and effective policy implications could be drawn toward modern and environmentally friendly energy sources, especially in attaining the Sustainable Development Goals.
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