Skip to main content
SpringerLink
Log in

The Impact of Electricity Production on Environmental Quality: The Role of Institutional Quality in Ghana

  • Research
  • Published:
Operations Research Forum Aims and scope Submit manuscript

Abstract

The study investigated the impact of electricity production on environmental quality by specifically considering the role of institutional quality. The study used secondary data spanning from 1995 to 2021 and the autoregressive distributive lag model (ARDL) as a method of estimation. The findings revealed that electricity production, both in the short and long run, negatively affects environmental quality. Similarly, foreign direct investment and environmental quality were found negative both in the short and long run whereas economic growth and environmental quality had a positive relation in the short and long run. Furthermore, the findings showed that fossil fuel consumption in the long run has a negative impact on environmental quality. The study thus recommends that policymakers strengthen the various institutions to ensure that electricity production improves environmental quality. Thus, future studies should be geared toward the disaggregation of electricity production into different components and examine the effects of each component on environmental quality.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2

Similar content being viewed by others

Data Availability

The datasets generated and or analysed during the current study are available from the corresponding author on reasonable request.

References

  1. Khan I, Hou F, Le HP (2021) The impact of natural resources, energy consumption, and population growth on environmental quality: fresh evidence from the United States of America. Sci Total Environ 754:142222

    Article  Google Scholar 

  2. Rahman MM, Vu XB (2020) The nexus between renewable energy, economic growth, trade, urbanisation, and environmental quality: a comparative study of Australia and Canada. Renew Energy 155:617–627

    Article  Google Scholar 

  3. Luni T, Majeed MT (2020) Improving environmental quality through renewable energy: evidence from South Asian economies. Int J Energy Water Resour 4(3):335–345

    Article  Google Scholar 

  4. Baumeister S (2018) We are still in! Conference report from the 2018 Ceres Conference. J Clean Prod 196:183–184

    Article  Google Scholar 

  5. Bisbis MB, Gruda N, Blanke M (2018) Potential impacts of climate change on vegetable production and product quality–a review. J Clean Prod 170:1602–1620

    Article  Google Scholar 

  6. World Bank, World Development Indicators (2019). https://data.worldbank.org/indicator/Eg.Fec.Rnew

  7. African Development Bank (2019) Climate change in Africa. Retrieved from: https://www.afdb.org/en/cop25/climate-change-africa. Accessed 17 Dec 2022

  8. Acheampong T, Menyeh BO, Agbevivi DE (2021) Ghana’s changing electricity supply mix and tariff pricing regime: implications for the energy trilemma. Oil, Gas and Energy Law, 19(3)

  9. Ghana Energy Commission. (2018) Energy (Supply and Demand) Outlook for Ghana. Ghana Energy Commission, Accra, Ghana. http://www.energycom.gov.gh/planning/data-center/energy-outlook-for-ghana. Accessed 8 Jul 2018

  10. Khan MK, Khan MI, Rehan M (2020) The relationship between energy consumption, economic growth, and carbon dioxide emissions in Pakistan. Financial Innovation 6(1):1–3

    Article  Google Scholar 

  11. Omri A, Daly S, Rault C, Chaibi A (2015) Financial development, environmental quality, trade and economic growth: what causes in MENA countries. Energy Econ 48:242–252

    Article  Google Scholar 

  12. Aye GC, Edoja PE (2017) Effect of economic growth on CO2 emissions in developing countries: evidence from a dynamic panel threshold model. Cogent Econ Finance 5(1):1379239

    Article  Google Scholar 

  13. Hassan ST, Baloch MA, Mahmood N, Zhang J (2019) Linking economic growth and ecological footprint through human capital and biocapacity. Sustain Cities Soc 47:101516

    Article  Google Scholar 

  14. Ulucak R, Apergis N (2018) Does convergence really matter for the environment? An application based on club convergence and on the ecological footprint concept for the EU countries. Environ Sci Policy 80:21–27

    Article  Google Scholar 

  15. Solarin SA, Bello MO (2018) Persistence of policy shocks on an environmental degradation index: the case of ecological footprint in 128 developed and developing countries. Ecol Ind 89:35–44

    Article  Google Scholar 

  16. Budihardjo S, Hadi SP, Sutikno S, Purwanto P (2013) The ecological footprint analysis for assessing the carrying capacity of an industrial zone in Semarang.

  17. Asumadu-Sarkodie S, Owusu PA (2017) The relationship between carbon dioxide emissions, electricity production, and consumption in Ghana. Energy Sources Part B 12(6):547–558

    Article  Google Scholar 

  18. Obuobi NK, Gatsi JG, Appiah MO, Kawor S, Amoah EK, Abeka MJ (2022) Trade liberalization policies and foreign direct investment inflows in Africa: evidence from new measures of trade liberalization. J Int Trade Econ Dev 31(3):394–409

    Article  Google Scholar 

  19. Harbaugh WT, Levinson A, Wilson DM (2002) Reexamining the empirical evidence for an environmental Kuznets curve. Rev Econ Stat 84(3):541–551

    Article  Google Scholar 

  20. Coondoo D, Dinda S (2002) Causality between income and emissions: a country group-specific econometric analysis. Ecol Econ 40(3):351–367

    Article  Google Scholar 

  21. Omisakin D, Olusegun A (2009) Economic growth and environmental quality in Nigeria: does the environmental Kuznets curve hypothesis hold? Environ Res J 3(1):14–18

    Google Scholar 

  22. Dogan E, Seker F (2016) The influence of real output, renewable and non-renewable energy, trade and financial development on carbon emissions in the top renewable energy countries. Renew Sustain Energy Rev 60:1074–1085

    Article  Google Scholar 

  23. Kang YQ, Zhao T, Yang YY (2016) Environmental Kuznets curve for CO2 emissions in China: a spatial panel data approach. Ecol Ind 63:231–239

    Article  Google Scholar 

  24. Adu DT, Denkyirah EK (2017) Economic growth and environmental pollution in West Africa: testing the environmental Kuznets curve hypothesis.

  25. Gill AR, Viswanathan KK, Hassan S (2018) The environmental Kuznets curve (EKC) and the environmental problem of the day. Renew Sustain Energy Rev 81:1636–1642

    Article  Google Scholar 

  26. Pata UK, Samour A (2022) Do renewable and nuclear energy enhance environmental quality in France? A new EKC approach with the load capacity factor. Prog Nucl Energy 149:104249

    Article  Google Scholar 

  27. Oteng-Abayie EF, Asaki FA, Eshun ME, Abokyi E (2022) Decomposition of the decoupling of CO2 emissions from economic growth in Ghana. Future Bus J 8(1):1–3

    Article  Google Scholar 

  28. Shahbaz M, Mahalik MK, Shah SH, Sato JR (2016) Time-varying analysis of CO2 emissions, energy consumption, and economic growth nexus: statistical experience in the next 11 countries. Energy Policy 98:33–48

    Article  Google Scholar 

  29. Anwar S, Alexander WR (2016) Pollution, energy use, GDP, and trade: estimating the long-run relationship for Vietnam. Appl Econ 48(53):5221–5232

    Article  Google Scholar 

  30. Kartal MT (2022) Production-based disaggregated analysis of energy consumption and CO2 emission nexus: evidence from the USA by novel dynamic ARDL simulation approach. Environ Sci Pollut Res 26:1–1

    Google Scholar 

  31. Bekun FV, Emir F, Sarkodie SA (2019) Another look at the relationship between energy consumption, carbon dioxide emissions, and economic growth in South Africa. Sci Total Environ 655:759–765

    Article  Google Scholar 

  32. Nan S, Huang J, Wu J, Li C (2022) Does globalization change the renewable energy consumption and CO2 emissions nexus for OECD countries? New evidence based on the nonlinear PSTR model. Energ Strat Rev 44:100995

    Article  Google Scholar 

  33. Majeed MT, Luni T, Tahir T (2022) A comparative analysis of nuclear energy consumption and CO2 emissions nexus: empirical evidence from the global economy and income groups. Environ Sci Pollut Res 18:1–5

    Google Scholar 

  34. Tamazian A, Chousa JP, Vadlamannati KC (2009) Does higher economic and financial development lead to environmental degradation: evidence from BRIC countries. Energy Policy 37(1):246–253

    Article  Google Scholar 

  35. Yuxiang K, Chen Z (2011) Financial development and environmental performance: evidence from China. Environ Dev Econ 16(1):93–111

    Article  Google Scholar 

  36. Salahuddin M, Alam K, Ozturk I, Sohag K (2018) The effects of electricity consumption, economic growth, financial development, and foreign direct investment on CO2 emissions in Kuwait. Renew Sustain Energy Rev 81:2002–2010

    Article  Google Scholar 

  37. Deng Z, Liu J, Sohail S (2022) Green economy design in BRICS: dynamic relationship between financial inflow, renewable energy consumption, and environmental quality. Environ Sci Pollut Res 29(15):22505–22514

    Article  Google Scholar 

  38. Jamil K, Liu D, Gul RF, Hussain Z, Mohsin M, Qin G, Khan FU (2022) Do remittance and renewable energy affect CO2 emissions? An empirical evidence from selected G-20 countries. Energy Environ 33(5):916–932

    Article  Google Scholar 

  39. Adebayo TS, Akinsola GD, Kirikkaleli D, Bekun FV, Umarbeyli S, Osemeahon OS (2021) Economic performance of Indonesia amidst CO2 emissions and agriculture: a time series analysis. Environ Sci Pollut Res 28(35):47942–47956

    Article  Google Scholar 

  40. Busu M, Nedelcu AC (2021) Analyzing the renewable energy and CO2 emission levels nexus at an EU level: a panel data regression approach. Processes 9(1):130

    Article  Google Scholar 

  41. Namahoro JP, Wu Q, Xiao H, Zhou N (2021) The impact of renewable energy, economic and population growth on CO2 emissions in the East African region: evidence from common correlated effect means group and asymmetric analysis. Energies 14(2):312

    Article  Google Scholar 

  42. Saidi K, Omri A (2020) Reducing CO2 emissions in OECD countries: do renewable and nuclear energy matter? Prog Nucl Energy 126:103425

    Article  Google Scholar 

  43. Jebli MB, Farhani S, Guesmi K (2020) Renewable energy, CO2 emissions and value added: empirical evidence from countries with different income levels. Struct Chang Econ Dyn 53:402–410

    Article  Google Scholar 

  44. Baloch MA (2018) Dynamic linkages between road transport energy consumption, economic growth, and environmental quality: evidence from Pakistan. Environ Sci Pollut Res 25(8):7541–7552

    Article  Google Scholar 

  45. Ben-Youssef A, Arouri ME, M’Henni H, Rault C (2012) Empirical analysis of the EKC Hypothesis for SO2 Emissions in selected Middle East and North African Countries. HAL.

  46. Cole MA, Rayner AJ, Bates JM (1997) The environmental Kuznets curve: empirical analysis. Environ Dev Econ 2(4):401–416

    Article  Google Scholar 

  47. Yahaya A, Nor NM, Habibullah MS, Ghani JA, Noor ZM (2016) How relevant is environmental quality to per capita health expenditures? Empirical evidence from a panel of developing countries. SpringerPlus 5(1):1–4

    Article  Google Scholar 

  48. Ansari MA (2022) Re-visiting the environmental Kuznets curve for ASEAN: A comparison between ecological footprint and carbon dioxide emissions. Renew Sustain Energy Rev 168:112867

    Article  Google Scholar 

  49. Ahmad A, Zhao Y, Shahbaz M, Bano S, Zhang Z, Wang S, Liu Y (2016) Carbon emissions, energy consumption and economic growth: an aggregate and disaggregate analysis of the Indian economy. Energy Policy 96:131–143

    Article  Google Scholar 

  50. Chen H, Zhang X, Wu R, Cai T (2020) Revisiting the environmental Kuznets curve for city-level CO2 emissions: based on corrected NPP-VIIRS nighttime light data in China. J Clean Prod 268:121575

    Article  Google Scholar 

  51. Li G, Zakari A, Tawiah V (2020) Does environmental diplomacy reduce CO2 emissions? A panel group means analysis. Sci Total Environ 722:137790

    Article  Google Scholar 

  52. Mrabet Z, AlSamara M, Hezam JS (2017) The impact of economic development on environmental degradation in Qatar. Environ Ecol Stat 24(1):7–38

    Article  Google Scholar 

  53. Ahmed Z, Zafar MW, Ali S (2020) Linking urbanization, human capital, and ecological footprint in G7 countries: an empirical analysis. Sustain Cities Soc 55:102064

    Article  Google Scholar 

  54. Ahmed Z, Asghar MM, Malik MN, Nawaz K (2020) Moving towards a sustainable environment: the dynamic linkage between natural resources, human capital, urbanization, economic growth, and ecological footprint in China. Resour Policy 67:101677

    Article  Google Scholar 

  55. Al-Mulali U, Ozturk I (2015) The effect of energy consumption, urbanization, trade openness, industrial output, and the political stability on the environmental degradation in the MENA (Middle East and North African) region. Energy 84:382–389

    Article  Google Scholar 

  56. Dogan E, Ulucak R, Kocak E, Isik C (2020) The use of ecological footprint in estimating the environmental Kuznets curve hypothesis for BRICST by considering cross-section dependence and heterogeneity. Sci Total Environ 723:138063

    Article  Google Scholar 

  57. Altıntaş H, Kassouri Y (2020) Is the environmental Kuznets Curve in Europe related to the per-capita ecological footprint or CO2 emissions? Ecol Ind 113:106187

    Article  Google Scholar 

  58. Sharif A, Baris-Tuzemen O, Uzuner G, Ozturk I, Sinha A (2020) Revisiting the role of renewable and non-renewable energy consumption on Turkey’s ecological footprint: evidence from Quantile ARDL approach. Sustain Cities Soc 57:102138

    Article  Google Scholar 

  59. Alola AA, Bekun FV, Sarkodie SA (2019) Dynamic impact of trade policy, economic growth, fertility rate, renewable and non-renewable energy consumption on ecological footprint in Europe. Sci Total Environ 685:702–709

    Article  Google Scholar 

  60. Van-Tran N, Van Tran Q, Do LT, Dinh LH, Do HT (2019) Trade off between environment, energy consumption and human development: do the levels of economic development matter? Energy 173:483–493

    Article  Google Scholar 

  61. Destek MA, Sinha A (2020) Renewable, non-renewable energy consumption, economic growth, trade openness, and ecological footprint: evidence from organisation for economic co-operation and Development countries. J Clean Prod 242:118537

    Article  Google Scholar 

  62. Balsalobre-Lorente D, Shahbaz M, Roubaud D, Farhani S (2018) How economic growth, renewable electricity, and natural resources contribute to CO2 emissions? Energy Policy 113:356–367

    Article  Google Scholar 

  63. Danish UR (2020) Moving toward sustainable development: the relationship between water productivity, natural resource rent, international trade, and carbon dioxide emissions. Sustain Dev 28(4):540–549

    Article  Google Scholar 

  64. Danish UR, Khan SU (2020) Determinants of the ecological footprint: role of renewable energy, natural resources, and urbanization. Sustain Cities Soc 54:101996

    Article  Google Scholar 

  65. Danish UR, Baloch MA, Mahmood N, Zhang JW (2019) Effect of natural resources, renewable energy and economic development on CO2 emissions in BRICS countries. Sci Total Environ 678:632–638

    Article  Google Scholar 

  66. WDI, World Development Indicators (2019) World Bank. https://data.worldbank.org/indicator/Eg.Fec.Rnew

  67. Wendling ZA, Emerson JW, de Sherbinin A, Esty DC, Hoving K, Ospina CD, Murray JM, Gunn L, Ferrato M, Schreck M (2020) Environmental performance index. New Haven, CT: Yale Center for Environmental Law And Policy. epi. yale. edu

  68. Achia TN, Wangombe A, Khadioli N (2010) A logistic regression model to identify key determinants of poverty using demographic and health survey data.

  69. Hakimi A, Hamdi H (2016) Trade liberalization, FDI inflows, environmental quality and economic growth: a comparative analysis between Tunisia and Morocco. Renew Sustain Energy Rev 58:1445–1456

    Article  Google Scholar 

  70. Asumadu-Sarkodie S, Owusu PA (2016) The relationship between carbon dioxide and agriculture in Ghana: a comparison of VECM and ARDL model. Environ Sci Pollut Res 23(11):10968–10982

    Article  Google Scholar 

  71. Pesaran MH, Shin Y, Smith RJ (2001) Bounds testing approaches to the analysis of level relationships. J Appl Economet 16(3):289–326

    Article  Google Scholar 

  72. EPA (2022) Environmental impacts of the electricity system. Retrieved from https://www.epa.gov/energy/about-us-electricity-system-and-its-impact-environment

  73. Shahbaz M, Nasreen S, Abbas F, Anis O (2015) Does foreign direct investment impede environmental quality in high-, middle-, and low-income countries? Energy Econ 51:275–287

    Article  Google Scholar 

  74. Radoine H, Bajja S, Chenal J, Ahmed Z (2022) Impact of urbanization and economic growth on environmental quality in western Africa: do manufacturing activities and renewable energy matter? Front Environ Sci 1602

  75. Rashedi A, Khanam T, Jonkman M (2020) On reduced consumption of fossil fuels in 2020 and its consequences on global environment and exergy demand. Energies 13(22): 6048.

    Article  Google Scholar 

  76. Bond D (2022) Negative ecology: fossil fuels and the discovery of the environment. Univ of California Press

    Book  Google Scholar 

  77. Ali HS, Zeqiraj V, Lin WL, Law SH, Yusop Z, Bare UA, Chin L (2019) Do quality institutions promote environmental quality? Environment Science Pollution Res 26(11):10446–10456

    Article  Google Scholar 

Download references

Acknowledgements

The authors are grateful to the reviewers, for demonstrating excellent knowledge in the subject area, with constructive and well-presented criticisms and opinions. Also, we wish to thank the chief editor and the editorial office. This journal is highly recommended for professionalism and excellent delivery of service.

Author information

Authors and Affiliations

  1. Department of Business Studies, Regentropfen University College, PMB, Bolgatanga, Ghana

    Foster Awindolla Asaki & Emmanuel Kwakye Amoah

  2. Department of Finance, School of Business, University of Cape Coast, PMB, Cape Coast, Ghana

    Mac Junior Abeka

Authors
  1. Foster Awindolla Asaki
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Emmanuel Kwakye Amoah
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Mac Junior Abeka
    View author publications

    You can also search for this author in PubMed Google Scholar

Contributions

All authors worked on conceptualization. All authors worked on methodology/study design. All authors worked on software. All authors worked on validation. All authors worked on formal analysis. All authors worked on investigation. All authors worked on resources. All authors worked on data curation. All authors worked on writing original draft. All authors worked on writing review and editing. All authors worked on visualization. All authors worked on supervision. All authors worked on project administration. All authors reviewed the manuscript.

Corresponding author

Correspondence to Emmanuel Kwakye Amoah.

Ethics declarations

Conflict of Interest

The authors declare no competing interests.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

This article is part of the Topical Collection on Operations Research in Applied Energy, Environment, Climate Change & Sustainability

Appendices

Appendix

Table 8 Unrestricted cointegration rank test (trace)
Full size table

Fig. 3

figure a

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Asaki, F.A., Amoah, E.K. & Abeka, M.J. The Impact of Electricity Production on Environmental Quality: The Role of Institutional Quality in Ghana. Oper. Res. Forum 5, 35 (2024). https://doi.org/10.1007/s43069-024-00317-9

Download citation

  • Received:

  • Accepted:

  • Published:

  • DOI: https://doi.org/10.1007/s43069-024-00317-9

Keywords

Search

Navigation