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The link between carbon emissions, renewable energy consumption, and economic growth: a heterogeneous panel evidence from West Africa

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Abstract

This study examined the nexus between carbon emissions, renewable energy consumption, and the economic growth of West African countries for the period 1990 to 2018. To be able to uncover reliable and valid findings, more robust panel estimation methods were employed for the study. From the heterogeneity and cross-sectional dependence tests, the study’s panels were heterogeneous and cross-sectionally dependent. Also, all the series were non-stationary at levels, but gained stationarity after first difference. Further, the Fisher test and the Westerlund and Edgerton bootstrap test found the variables to be cointegrated in the long run. The CCEMG and the DCCEMG estimators were used to explore the long-run equilibrium relationship amid the series, and from the results of the whole sample, CO2 emissions and renewable energy consumption (REC) had no vital influence on economic growth (GDP) in both estimators. However, the results were a bit different in the sub-panels. Also from the whole sample, control variables urbanization (URB) and population growth (POP) had no material effect on GDP in both estimators. The results were, however, dissimilar in the sub-panels. Finally, the Dumitrescu-Hurlin test was employed to examine the causalities amid the series, and the results were diverse in the various panels. Policy recommendations are further discussed.

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Abbreviations

WA:

West Africa/West African

NRE:

non-renewable energy

NREC:

non-renewable energy consumption

RE:

renewable energy

REC:

renewable energy consumption

EC:

energy consumption

ED:

environmental degradation

POP:

population

URB:

urbanization

FDI:

foreign direct investments

FD:

financial development

LI:

low-income countries

LMI:

lower-middle-income countries

GDP:

economic growth

CO2 :

carbon emissions

CCEMG:

Common Correlated Effects Mean Group

DCCEMG:

Dynamic Common Correlated Effects Mean Group

MENA:

Middle East and North Africa

OECD:

Organization for Economic Co-operation and Development

EU:

European Union

US:

United States

UAE:

United Arab Emirates

OVB:

omitted variable bias

BRICS:

Brazil, Russia, India, China, and South Africa

JB:

Jacque-Bera

VIF:

variance inflation factor

WDI:

world development indicators

CLRM:

Classical Linear Regression Model

CLT:

Central Limit Theorem

CD:

cross-sectional dependence

LM:

Lagrangian multiplier

CADF:

cross-sectionally augmented Dickey-Fuller

CIPS:

Cross-sectional Im, Pesaran and Shin

CCE:

common correlated effects

DCCE:

dynamic common correlated effects

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Funding

The authors duly acknowledge the financial support of the National Natural Science Foundation of China, Grant Award Number 71371087.

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Authors and Affiliations

  1. School of Finance and Economics, Jiangsu University, Zhenjiang, People’s Republic of China

    Mohammed Musah, Yusheng Kong, Stephen Kwadwo Antwi & Mary Donkor

  2. Institute of Applied Systems Analysis (IASA), Faculty of Science, Jiangsu University, Zhenjiang, People’s Republic of China

    Isaac Adjei Mensah

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  1. Mohammed Musah
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  2. Yusheng Kong
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Correspondence to Mohammed Musah.

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Musah, M., Kong, Y., Mensah, I.A. et al. The link between carbon emissions, renewable energy consumption, and economic growth: a heterogeneous panel evidence from West Africa. Environ Sci Pollut Res 27, 28867–28889 (2020). https://doi.org/10.1007/s11356-020-08488-8

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