Environmental Challenges 4 (2021) 100092

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Environmental Challenges
journal homepage: www.elsevier.com/locate/envc

Investigating factors affecting renewable energy consumption: A panel data

analysis in Sub Saharan Africa
Sydney Oluoch a,∗, Pankaj Lal a, Andres Susaeta b
a
Department of Earth and Environmental Studies, Montclair State University, 1 Normal Ave, Montclair, NJ 07043, USA
b
School of Forest Resources and Conservation, University of Florida, 315 Newins Ziegler Hall, Gainesville, FL 32611, USA

a r t i c l e i n f o a b s t r a c t

Keywords: Renewable energy remains Sub-Saharan Africa’s (SSAs) best option to leapfrog and escape the learning curve in
Sub-Saharan Africa energy access while simultaneously combating climate change. Consequently, it is imperative to understand the
Renewable energy relationships between SSAs renewable energy consumption and social, economic, and environmental explanatory
Panel data
variables. This paper puts forward an empirical model to outline the factors that can promote renewable energy
consumption. We considered the panel autoregressive distributed lags (ARDL) panel models of 23 SSA countries
with annual data from 1998 to 2014. From the main findings, the dependent variable renewable energy con-
sumption is significant and positively correlates with the independent variables gross domestic product (GDP)
per capita and education index in the long run as expected. Whereas renewable energy consumption is significant
and negatively correlates with the independent variables, CO2 emissions per capita, and life expectancy index in
the long run. The study highlights the potential of effective management and implementation of renewable energy
development in promoting social indicators such education indexes, while improving economies and reducing
CO2 emissions.

1. Introduction Most SSA countries in the region rely on carbon intensive non-
renewables and unsustainable use of biomass as the main source of en-
Climate change driven by anthropogenic activities remains one of ergy that results in environmental degradation (Adedoyin et al., 2021).
the most notable global threats facing both the developing and devel- Despite the dependence on non-renewables, SSA average renewable en-
oped world (Acheampong et al., 2019; Ito, 2017). This has resulted in ergy consumption is currently at 63.7% which is higher than other de-
an impetus to shift from intensive carbon-based energy to greener tech- veloped and developing regions globally (Fig. 1). SSA countries are also
nologies (Asongu and Odhiambo, 2021; Inglesi-Lotz, 2016; Ito, 2017). vulnerable to the catastrophic consequences of climate change such
Energy remains essential to economic development, as modern comforts as food insecurity, scarce water resources, deterioration of natural re-
and industrial production processes depend on energy (Akintande et al., sources’ productivity, shrinking biodiversity, decline in human health,
2020; McGee and Greiner, 2019; Shahbaz et al., 2015). As develop- land degradation and desertification (Oluoch et al., 2019). Hence, the
ing countries strive to meet their economic goals, they are faced with need for energy to fuel the desire for economic growth in SSA is at
doing so at the cost of the environment (Acheampong et al., 2019; a critical stage where the balance between mitigating climate change
Akintande et al., 2020; Asongu and Odhiambo, 2021). Sub-Saharan and the ability to use scarcely available capital for clean energy ven-
Africa (SSA) has emerged as the greatest growing economy with an tures must be put in place (Apergis et al., 2018; Wesseh and Lin, 2016).
estimated real GDP growth of 5% over the period of 2000 to 2020 Many SSA governments have come to this realization and are develop-
adding up-to $3.5 trillion in the form of business spending (WEF, 2016; ing energy policies increasingly open to the development of renewables
UNIDO, 2016). This growth goes hand in hand with the use of en- (Kazimierczuk, 2019; Pueyo, 2018).
ergy, leading to the question of how SSA will meet its increasing energy SSA countries have made a commitment to the Paris climate agree-
needs? Despite this economic growth, access to electricity has stagnated ment that aims to lower global carbon emission levels (Africa Renew-
over the years increasing from about 23% to 47.7% between 2000 and able, 2016). However, the main challenge for SSA is meeting these en-
2014 (Acheampong et al., 2019; da Silva et al., 2018; WDI, 2018). This vironmental goals while simultaneously achieving economic prosperity
could be attributed to population growth outpacing the rate of growth (Opeyemi et al., 2019). Renewable energy technology has the capacity
in electricity generation (Sarkodie and Adams, 2020; Nyiwul, 2017). to sustainably bridge the energy access gap and foster economic growth

∗
Corresponding author.
E-mail address: oluochs1@montclair.edu (S. Oluoch).

https://doi.org/10.1016/j.envc.2021.100092
Received 30 November 2020; Received in revised form 23 March 2021; Accepted 24 March 2021
2667-0100/© 2021 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/)
S. Oluoch, P. Lal and A. Susaeta Environmental Challenges 4 (2021) 100092

Fig. 1. Renewable energy consumption global trends from 1990 to 2016 (WDI, 2018).

in SSA due to abundant renewable energy resources (Nyiwul, 2017). countries over a time of 1980–2011. They considered real GDP, both re-
The advantage that SSA countries have over developed countries is newable and non-renewable energy consumption, total labor force, cap-
that they can employ innovative technologies without having to follow ital, and state of technological progress. Renewable energy was found
the historical trajectory of energy systems that have resulted in nega- to be a better driver for economic growth than conventional fossil fu-
tive environmental impacts (APP, 2015). Despite these advantages, SSA els over the study period. They established that transition from non-
stands to bear the greatest negative impact of climatic change due to renewable to renewable is limited due to scale, economics and sitting
low economic development, high dependence on traditional biomass re- problems. Esso and Keho (2016) examined the long-run and casual re-
sources, and low technological advancement (Acheampong et al., 2019; lationships among energy consumption, CO2 emission and economic
APP, 2015). Currently, SSA contributes about 7.1% of the global green- growth for 12 SSA countries from 1971 and 2010. They found that en-
house gas (GHG) emissions, which is relatively small considering that ergy consumption and economic growth results in atmospheric pollu-
it hosts 14% of the world’s population (WDI, 2018) (Fig. 2). However, tion. Adams et al. (2016) examined the relationship between energy
rapid population growth and expanding economies could contribute to a consumption and economic growth, and the role of democracy in mod-
significant increase in SSA’s GHG levels and exacerbate climate change erating this relationship using panel data of 16 countries in SSA from
(da Silva et al., 2018). 1971 to 2013. Their findings were interaction between energy consump-
tion and democracy is positively related to economic growth, support-
1.1. Prior empirical studies in SSA ing the view that democracy facilitates energy consumption and eco-
nomic growth. A more recent study by da Silva et al. (2018) confirms
Several studies demonstrating the ability of renewable energy to the need for further investigations on the potential and status of re-
improve energy security, provide socio-economic benefits, reduce lo- newable energy in SSA. Using panel – autoregressive distributed lags
cal pollution, decentralize energy to remote areas, and mitigate climate (ARDL) model covering 1990–2014, they analyzed how renewable en-
change have been conducted (Inglesi-Lotz, 2016; Salim and Rafiq, 2012; ergy in electricity production is affected by factors such as crude oil
Shahbaz et al., 2015). However, there remains a consensus among many prices, population growth, CO2 emissions and GDP per capita. Their
authors that the drivers behind different types of non-renewable energy findings were as follows, economic development and an increased use
consumption have been studied extensively, whereas the drivers be- of energy aid renewable energy development while population growth
hind renewable energy are yet to be fully quantified (Inglesi-Lotz, 2016; impedes it. Acheampong et al. (2019) measured the impact of glob-
Ito, 2017; Salim and Rafiq, 2012). Furthermore, Nyiwul (2017) and alization, trade openness and renewable energy on carbon emissions
Sardosky (2009) admit that while there has been active research in mod- for 46 SSA countries between 1980 and 2015. They applied the fixed
eling the relationship between renewable energy consumption and in- and random effect estimation and found that renewable energy and for-
come in developed economies, there remains a gap in the domain of eign direct investments contribute to the reduction of carbon emissions
renewable energy and technical efficiency in developing countries. while trade openness deteriorates the environment. Asongu and Odhi-
Amongst these groups of studies are Wesseh and Lin (2016) that pro- ambo (2021) applied the generalized method of moments (GMM) and
vided an insight to the effectiveness of renewable energy for 34 African quantile regression to investigate linkages between financial develop-

2
S. Oluoch, P. Lal and A. Susaeta Environmental Challenges 4 (2021) 100092

Fig. 2. Global trends for CO2 emissions per capita 1990 to 2015 (WDI, 2018).

ment, income inequality and renewable energy consumption from 39 order to analyze the contribution that each variable has on renewable
countries in SSA. Their outcome showed that financial development pro- energy consumption in context of 23 SSA countries from 1998 to 2014.
motes renewable energy consumption, whereas income inequality coun- The rest of this paper is structured as follows: the second section dis-
teracts the positive effect. Apergis et al. (2018) used panel methods to cusses methodology including the theoretical model approach used and
explore the link between CO2 emissions, GDP per capita, renewable en- data manipulation; the third section has a discussion that concludes the
ergy consumption, and health indicator for 42 SSA countries spanning analysis.
the period 1995 to 2011. Their results show a long-term relationship
between variables with renewable energy consumption reducing CO2 2. Methodology
emissions.
Asongu et al. (2019) investigated the conditional relationship be- 2.1. The panel ARDL-PMG method
tween renewable energy and environmental quality in 40 SSA countries
from 2002 to 2017. Their findings suggest that renewable energy de- In this study we apply the panel ARDL-PMG method as proposed
creases CO2 emissions. Opeyemi et al. (2019) investigated the dynamic by Perasan et al. (1999) that is an error correction method efficient at
relationship between renewable energy consumption with trade perfor- defining short and long relationships (Uzar, 2020a). The PMG estima-
mance, corruption control, regulatory quality in 42 SSA countries us- tors assume that the explanatory variables can be treated as exogenous,
ing the GMM methods. They found a negative relationship between re- and there is a long-run relationship between the dependent and explana-
newable energy consumption and trade performance, whereas a poten- tory variables (Lee and Wang, 2015). Unlike the mean group (MG) es-
tial net positive impact on manufacturing impact for renewable energy timator that uses the average value of coefficient for each country and
consumptions and the strengthening of corruption control, regulatory assumes that the slope coefficients and error variance are the same for
framework, and finance for private sector. For our study we investigate each country. The PMG estimator assumes that the long-term coefficient
the role of governance of institutions measured by corruption percep- is homogeneous for each country, while short-term coefficient and error
tion index to influence renewable energy consumption. Except for the variance are heterogenous (Lee and Wang, 2015; Uzar, 2020b). Further-
study by Silva et al. (2018) and Opeyemi et al. (2019), the role of social more, da Silva et al. (2018) point out that the panel-ARDL method is
factors such as corruption perception influencing institutional and regu- more suitable than the other panel data methods such as fixed effects,
latory frameworks that support renewables has not been fully exploited instrumental variables and GMM estimators, as these methods can pro-
in SSA. We use the ARDL approach using the full pooled mean group duce inconsistent estimates unless the coefficients are identical across
(PMG) estimator to assess the short and long relationships of explana- countries. The panel-ARDL method produces consistent and efficient es-
tory variables. We move one step further than Silva et al. (2018) by timators and eliminates endogeneity problem by including the lag length
exploring how the influence of explanatory variables on specific coun- of the variables (Uzar, 2020b).
tries in the short run relationships, with the goal of highlighting factors We present the ADRL (p, q, q,…,q) panel model as described by
that may explain renewable energy consumption trends in some coun- Perasan et al. (1999) with Renewable Energy Consumption (REC), as the
tries and make suitable policy recommendations. Specifically, we aim dependent variables for group i in response to many factors described
to contribute to this existing research gap by combining economic (GDP as:
∑𝑝 𝑞
∑
per capita), social (life expectancy index, education index, and corrup-
tion perception index) and environmental (CO2 emissions) variables in- 𝑅𝐸 𝐶𝑖𝑡 = 𝛼𝑖𝑗 𝑅𝐸 𝐶𝑖, 𝑡−𝑗 𝛿 ′𝑖𝑗 𝑋𝑖,𝑡−𝑗 𝜇𝑖 + 𝜀𝑖𝑡 (1)
𝑗=1 𝑗=0

3
S. Oluoch, P. Lal and A. Susaeta Environmental Challenges 4 (2021) 100092

Table 1
Variables, definition and descriptive statistics.

Variable/Acronym Definition Min 1st Qu. Median Mean 3rd Qu. Max

Renewable energy Share of renewable energy in 16.59 64.38 79.62 73.11 90.32 97.97
consumption (% of total) total energy consumption.
(REC).
GDP per Capita (current US $) Sum of gross value added by 119.3 368.52 662.52 1529.40 1432.23 9692.16
(GDPpc) producers in the economy
divided by the population.
CO2 Emission (metric tons per CO2 emissions per capita. 0.02 0.09 0.29 0.90 0.60 9.62
capita) (CO2pc)
Life Expectancy Index (LEI) The number of years a 0.33 0.47 0.53 0.53 0.60 0.69
newborn infant expected to
live.
Education Index (EI) Mean years of schooling index. 0.17 0.33 0.43 0.42 0.51 0.68
Corruption Perception Index. A measure corruption levels in 2.1 22 27 30.16 35 64
(COR) nations.

Where X symbolizes lnGDPpc, lnCO2pc, lnLEI, lnEI, and lnCOR as Congo Rep, Ethiopia, Gabon, Mozambique, Rwanda, Sudan, and Togo
the vector of the explanatory variables for group i, and t denotes time missing up to 3 entries for the COR variable. To overcome missingness
period, 𝛿 ′𝑖𝑗 are coefficient vectors, whereas 𝜇𝑖 represents the fixed effects. and ensure a robust outcome for our model, we conducted the simple
The reparametrized model becomes Eq. (2) below. random imputation procedure that allows for unbiased parameter esti-
mates and accounts for increased variability due to missing values as
𝑝−1 𝑞−1
∑ ∑ described by Akintande et al. (2020).
Δ𝑅𝐸 𝐶𝑖𝑡 = 𝜙𝑖 (𝑅𝐸 𝐶𝑖, 𝑡−𝑗 − 𝛽 ′𝑖 𝑋𝑖𝑡 ) 𝛼 ∗ 𝑖𝑗 Δ𝑅𝐸 𝐶𝑖, 𝑡−𝑗 + 𝛿 ∗ ′𝑖𝑗 Δ𝑋𝑖,𝑡−𝑗 𝜇𝑖 + 𝜀𝑖𝑡
𝑗=1 𝑗=0

(2) 3.2. Unit root tests

Where 𝛽 ′𝑖 measures the long-run impact of the explanatory variables As a first step of empirical analysis, we conducted unit root tests
on renewable energy consumption and 𝜙𝑖 is the error corrector mecha- to test for stationarity. We used the Im–Pesaran–Shin (IPS) test for as-
nism impact. The disturbances 𝜀𝑖𝑡 are independently distributed across sumption of heterogeneous slopes and the Levin–Lin–Chu (LLC) test that
time and units, with zero mean and variance constant within each unit. assumes the slopes are homogeneous, with the null hypothesis that all
the panels contain a unit root (da Silva et al., 2018). Whereas, we con-
2.2. Estimation procedures ducted the cross-sectionally augmented Dickey–Fuller (CADF) test, a
second-generation panel unit root test that grounds its estimate on the
We adopted a balanced panel data set of 16 years (1998 to 2014) null hypothesis that all series are nonstationary (Pesaran et al., 2003;
and 23 countries (Botswana, Cameroon, Chad, DR Congo, Congo Rep, Sarkodie and Adams, 2020). Most of the variables have unit roots in the
Cote d’ Ivoire, Ethiopia, Gabon, Ghana, Kenya, Malawi, Mozambique, levels for both the IPS and LLC tests. However, the same tests in the
Namibia, Nigeria, Rwanda, Senegal, South Africa, Sudan, Tanzania, first difference, reveals stationarity, thus satisfying the panel ARDL re-
Togo, Uganda, Zambia and, Zimbabwe) primarily due to available data quirement that the variables should be I(0) or I(1) (Table 3). The CADF
for those countries in Transparency international database. The data test is somewhat consistent with the IPS and LLCs tests with only lnREC
was obtained mainly from World Bank Data Indicators (WDI) except and lnLEI containing unit roots at the level for both constant and con-
education index (EI) and life expectancy index (LEI) that was drawn stant and trend solutions. At the first differences the null hypothesis that
from UNDP development reports and corruption perception index (COR) unit roots can be rejected at 1% transforms both lnREC and lnLEI into
that was drawn from transparency international database (Table 1) stationarity (Table 3). From the CADF test none of the variables in the
(TI, 2018; UNDP, 2018; WDI, 2018). We standardized our variables by model are found to be I(2) which is a requirement for the ARDL method
obtaining their natural logarithmic forms to overcome heteroscedastic- (Table 4).
ity. The specification was then subjected to unit root test, cointegration
tests, and model estimation using the ARDL PMG method. The statistical 3.3. Cointegration tests
analysis tool STATA 15 software was used for the estimation procedures.
We conducted a cointegration test using by applying the Pedroni
3. Results test, and the Westerlund test as second-generation test. The pedroni test
statistics with the null hypothesis that there is no cointegration for all
3.1. Descriptive statistics units of the panel (Pedroni, 1999). Whereas, the Westerlund test imposes
fewer restrictions and has an alternate hypothesis that some panels are
The descriptive statistics of some selected SSA countries are repre- cointegrated. The test statistic reported in Table 5 shows strong evidence
sented in Table 2. Interestingly, while DR Congo has the highest renew- that all panels in the model are cointegrated. This result demonstrates
able energy consumption, it also has the lowest values for corruption that the long-term estimates across all countries obtained from the PMG
perception index. Whereas, Namibia has the lowest values in renew- method are stronger (Silva et al., 2018; Uzar, 2020a).
able energy consumption, and the highest corruption perception index.
Gabon has the greatest GDP per capita followed by Namibia, Cameroon, 3.4. Model estimation (panel ARDL-PMG)
Kenya, Zambia, Malawi, Ethiopia, and DR Congo, respectively. In terms
of the human development indexes (life expectancy index and education We determined the optimal lags before determining the short and
index), Gabon and Namibia have the highest values, while also being the long relationships (Table 6). The error correction term has a value be-
highest CO2 emitters per capita. Some of the variables notably GDPpc tween −1 and 0 and is statistically significant at 5% level. This indicates
and COR were characterized by missing observations ranging from 1% convergence of the level of balance in the long run (Uzar, 2020a). For the
to 5% that is negligible. With countries such as Chad, Rwanda, Uganda long-term relationship out of the five explanatory variables tested four
and missing only one entry each for the REC variable. While DR Congo, are individually statistically significant at 99% confidence. These are

4
S. Oluoch, P. Lal and A. Susaeta Environmental Challenges 4 (2021) 100092

Table 2
Descriptive statistics for selected countries in SSA.

Variable Country Min 1st Qu. Median Mean 3rd Qu. Max

REC Cameroon 77.39 78.60 84.38 82.14 84.99 86.13

DR Congo 92.87 96.84 97.04 96.83 97.88 98.34
Ethiopia 92.72 94.36 94.65 94.63 95.06 96.23
Gabon 68.26 69.67 69.67 72.91 75.08 82.14
Kenya 75.52 78.18 79.57 79.35 80.52 83.20
Malawi 76.47 79.62 80.36 80.30 81.43 82.71
Namibia 27.62 32.94 33.59 33.44 34.30 37.84
Zambia 87.76 89.33 89.76 89.94 90.46 92.81
GDPpc Cameroon 583.10 675.92 965.37 974.16 1191.71 1441.14
DR Congo 100.69 171.23 273.49 269.43 350.27 461.57
Ethiopia 111.53 124.05 194.08 258.89 355.60 571.16
Gabon 3821.81 4119.15 7206.97 7217.05 9.679.74 11530.1
Kenya 402.17 444.23 711.72 751.03 991.85 1,335.06
Malawi 149.37 265.43 304.90 310.56 382.68 525.65
Namibia 1716.9 2114.2 3884.65 3684.85 5143.13 5679.83
Zambia 330.22 376.98 1030.32 968.67 1456.13 1850.79
CO2pc Cameroon 0.20 0.21 0.22 0.26 0.31 0.36
DR Congo 0.02 0.02 0.03 0.03 0.04 0.07
Ethiopia 0.05 0.06 0.07 0.07 0.08 0.12
Gabon 2.77 2.86 2.96 3.28 3.55 4.24
Kenya 0.20 0.26 0.29 0.28 0.31 0.34
Malawi 0.07 0.07 0.07 0.08 0.08 0.09
Namibia 0.87 0.98 1.13 1.17 1.41 1.58
Zambia 0.14 0.18 0.18 0.20 0.20 0.29
LEI Cameroon 0.49 0.49 0.50 0.51 0.52 0.55
DR Congo 0.46 0.48 0.53 0.53 0.57 0.60
Ethiopia 0.48 0.52 0.58 0.57 0.64 0.68
Gabon 0.61 0.61 0.62 0.63 0.65 0.68
Kenya 0.47 0.50 0.53 0.55 0.60 0.64
Malawi 0.37 0.40 0.46 0.48 0.57 0.66
Namibia 0.54 0.55 0.57 0.60 0.66 0.69
Zambia 0.46 0.49 0.52 0.52 0.56 0.58
EI Cameroon 0.35 0.38 0.41 0.42 0.45 0.49
DR Congo 0.46 0.37 0.37 0.37 0.42 0.46
Ethiopia 0.14 0.20 0.26 0.25 0.31 0.32
Gabon 0.53 0.56 0.58 0.58 0.60 0.62
Kenya 0.40 0.43 0.47 0.47 0.51 0.52
Malawi 0.38 0.38 0.39 0.40 0.44 0.45
Namibia 0.51 0.51 0.52 0.52 0.53 0.55
Zambia 0.46 0.49 0.52 0.52 0.56 0.58
COR Cameroon 14 20 22 21.71 24 27
DR Congo 14 17 19 18.82 20 22
Ethiopia 22 25 27 28.47 33 35
Gabon 28 30 34 37.12 41 57
Kenya 19 21 21 22 22 27
Malawi 27 28 32 32.59 37 41
Namibia 41 44 47 47.71 53 57
Zambia 25 26 30 30.47 35 38

Table 3
IPS and LLC panel unit roots tests results.

Variable IPS LLC

Level 1st diff Level 1st diff

lnREC 1.625 −4.970 −0.563 −5.015

[0.948] [0.000] [0.287] [0.000]
lnGDPpc 3.421 −7.818 −1.643 −9.608
[0.999] [0.000] [0.050] [0.000]
lnCO2pc 1.088 −6.625 −1.6025 −7.790
[0.862] [0.000] [0.0545] [0.000]
lnLEI 1.488 −9.239 −5.672 −12.877
[0.9317] [0.000] [0.000] [0.000]
lnEI 1.363 −2.754 −6.355 −3.561
[0.914] [0.003] [0.000] [0.000]
lnCOR −1.760 −8.154 −3.583 −12.224
[0.039] [0.000] [0.000] [0.000]
p-values in the squared parentheses.

5
S. Oluoch, P. Lal and A. Susaeta Environmental Challenges 4 (2021) 100092

Table 4 Cameroon, Chad, DR Congo, Ethiopia, Kenya, Malawi, Mozambique,

CADF panel unit root test results. Senegal, Tanzania, Togo, Uganda, Zambia, and Zimbabwe. The impact
Type of test Constant of Life expectancy index on renewable energy is positive and significant
for DR Congo, Gabon, Kenya, Malawi, and Zambia while negative and
t-bar Z[t-bar] p-value
significant for Botswana, Ethiopia, Mozambique, and Rwanda. The re-
lnREC Level −1.846 −0.500 0.309 lationship between lnEI and renewable energy consumption reveals a
1st diff −2.626 −4.163 0.000
positive effect in Gabon and Ethiopia, and a negative one in Botswana,
lnGDPpc Level −3.331 −7.479 0.000
1st diff −3.332 −7.486 0.000 Cameroon, Kenya, Malawi, Rwanda, Sudan, and Zambia. For lnCOR,
lnCO2pc Level −2.108 −1.728 0.042 the relationship is positive for Gabon and Namibia, and negative for
1st diff −2.582 −3.960 0.000 Cameroon, Congo Rep, Malawi, and Tanzania. From this outcome it is
lnLEI Level −1.871 −0.616 0.269 important to note that few countries such as Gabon, Ethiopia and Kenya
1st diff −2.081 −1.605 0.054
exhibit interesting trends that will result in an overall increase in renew-
lnEI Level −2.266 −2.473 0.007
1st diff −2.457 −3.369 0.000 able energy consumption.
lnCOR Level −2.165 −2.000 0.023
1st diff −3.138 −6.571 0.000 4. Discussion
Constant and trend
lnREC Level −2.339 −0.234 0.407
1st diff −2.906 −2.923 0.002 Greater levels of income are associated with an ability to bear high
lnGDPpc Level −3.381 −5.182 0.000 regulatory costs in terms of taxes and tariffs for power (da Silva et al.,
1st diff −3.209 −4.365 0.000 2018). An increase in energy has shown to be a positive driver for
lnCO2pc Level −2.135 0.738 0.770 economic growth (da Silva et al., 2018; Inglesi-Lotz, 2016; Salim and
1st diff −2.581 −1.381 0.084
lnLEI Level −2.346 −0.266 0.395
Rafiq, 2012). For the long run estimates, the lnGDPpc coefficient was
1st diff −4.781 −11.830 0.000 positive and significant at 1% level. With a one unit increase in lnGDPpc
lnEI Level −1.895 1.873 0.969 enhancing renewable energy consumption by 0.037 units. The short
1st diff −3.521 −5.844 0.000 run relationship has a different outcome as all SSA countries with sta-
lnCOR Level −3.294 −4.769 0.000
tistically significant lnGDPpc coefficients were also negative. Studies
1st diff −2.998 −3.364 0.000
such as Kilinc-Ata (2016) found that income measures such as GDP per
capita will show positive effect on renewable energy consumption for
Table 5 developed countries, but not for developing countries. Correspondingly,
Pedroni and Westerlund cointegration test results. Nyiwul (2017) established that SSA expanding renewable energy con-
Statistic p-value sumption was not strongly related to economic growth. Uzar (2020a) ad-
mitted that the relationship between renewable energy consumption
Modified Philips–Perron t 4.287 0.000
Philips–Perron t −7.885 0.000
and income can be ambiguous, after finding a negative relationship
Augmented dickey −7.164 0.000 between GDP per capita and renewable energy that was not signifi-
Westerlund test −2.379 0.008 cant. As increasing energy needs can be met from different sources,
thereby increasing demand for renewable energy, or increasing demand
Table 6
for cheaper fossil fuels (Uzar, 2020a).
PMG estimation results (1, 1, 0, 0, 1, 1). On the contrary, Ackah and Kizys (2015), Asafu-Adjaye (2000),
Sardosky (2009) and Shahbaz et al. (2015) studies in SSA found that
Variable Coefficient Std. error z-statistic p-value GDP per capita has a positive and significant effect on the renewable
Long run energy consumption. The negative value for the short run relationships
lnGDPpc 0.038 0.006 6.41 0.000 in our study can be attributed to low-income levels among SSA resi-
lnCO2pc −0.123 0.008 −14.03 0.000 dents especially in rural settlements (76% of total population), mak-
lnLEI −0.397 0.073 −5.40 0.000
lnEI 0.111 0.028 3.91 0.000
ing it difficult for governments to distribute electricity (Nyiwul, 2017;
lnCOR 0.004 0.007 0.56 0.577 Kilinc-Ata, 2016). This is coupled to the high cost and unreliable supply
Short run of electricity resulting in losses of up to 2–4% of GDP for most coun-
ECT −0.269 0.105 −2.56 0.011 tries in SSA (APP, 2015). This has made electricity unaffordable to SSA
lnGDPpc −0.064 0.038 −1.71 0.088
residents, which in turn has stifled revenue for existing and new renew-
LnCO2pc −0.071 0.025 −2.81 0.005
lnLEI 0.189 0.678 0.28 0.781 able energy projects (APP, 2015; Wesseh and Lin, 2016). Furthermore,
lnEI −0.630 0.997 −0.63 0.528 the lack of economies of scale for existing renewable energy plants has
lnCOR −0.029 0.049 −0.60 0.546 made many projects non-viable in the long term (APP, 2015). The re-
Constant 0.976 0.401 2.43 0.015 lationship between limited power generation and low income is cyclic,
translating energy inequality to slow economic growth and investments
(APP, 2015).
InGDPpc and lnEI with positive coefficients, while lnCO2pc and lnLEI Renewable energy should result in a decreased cost of power es-
have negative coefficients. In the short run relationship out of the 5 pecially after the projects have been commissioned and a return on
explanatory variables tested only InGDPpc and lnCO2pc are negative investment is realized. However, renewables are still more expensive
and statistically significant. Since some variables in some countries were than fossil fuels, due to long-term subsidies for fossil fuels in SSA
heterogenous it was necessary to conduct a full PMG test for short run (Adedoyin et al., 2021; Asongu et al., 2019; Wesseh and Lin, 2016). As
relationships (Table 7). a result, incentives such as feed-in tariffs should be instituted to ensure
Table 7 lists country specific short-term relationships estimated us- bulk production at a fix price to attract investment and reduce price for
ing the full PMG. The effect of lnGDPpc on renewable energy con- consumers (Wesseh and Lin, 2016). Renewable energy can also stimu-
sumption is negative and statistically significant in Chad, Congo Rep, late economies and boost income by creating employment opportuni-
Kenya, Malawi, Senegal, South Africa, Sudan, and Zambia. However, ties both directly and indirectly. Direct opportunities involve employ-
only Namibia exhibits a positive and statistically significant coefficient ment in provision of labor services to renewable energy power plants
of renewable consumption. The relationship between CO2 emissions and through day to day operations that require manpower. Indirect employ-
renewable energy consumption is negative and significant in Botswana, ment opportunities can arise from the provision of electricity and auxil-

6
S. Oluoch, P. Lal and A. Susaeta Environmental Challenges 4 (2021) 100092

Table 7
Full Short-run PMG estimates for selected countries.

Country Variable Coeff Country Variable Coeff

Cameroon ECT 0.001(0.020) Kenya ECT −0.263(0.085)∗ ∗

lnGDPpc 0.022(0.018) lnGDPpc −0.073(0.036)∗ ∗
lnCO2pc −0.123(0.011)∗ ∗ ∗ lnCO2pc −0.111(0.021)∗ ∗ ∗
lnLEI −0.268(0.493) lnLEI 1.067(0.388)∗ ∗
lnEI −0.729(0.188)∗ ∗ ∗ lnEI −3.192(0.835)∗ ∗ ∗
lnCOR −0.042(0.014)∗ ∗ lnCOR −0.001(0.027)
DR Congo ECT 0.002 (0.104) Malawi ECT −0.003(0.005)
lnGDPpc −0.001 (0.002) lnGDPpc −0.026(0.009)∗
lnCO2pc −0.034(0.003)∗ ∗ ∗ lnCO2pc −0.222(0.022)∗ ∗ ∗
lnLEI 0.544(0.129)∗ ∗ ∗ lnLEI 1.035(0.236)∗ ∗ ∗
lnEI −0.011(0.070) lnEI −0.896(0.264)∗ ∗ ∗
lnCOR −0.006(0.11) lnCOR −0.073(0.20)∗ ∗ ∗
Ethiopia ECT −0.015(0.005)∗ ∗ Namibia ECT −0.195(0.084)∗ ∗
lnGDPpc 0.002(0.003) lnGDPpc 0.378(0.128)∗ ∗
lnCO2pc −0.034(0.004)∗ ∗ ∗ lnCO2pc −0.079(0.066)
lnLEI −0.359(0.111)∗ ∗ ∗ lnLEI 0.404(0.800)
lnEI 0.091(0.032)∗ ∗ lnEI −0.356(3.335)
lnCOR −0.002(0.003) lnCOR 0.723(0.232) ∗ ∗
Gabon ECT 0.499(0.110)∗ ∗ ∗ Zambia ECT −0.009(0.006)∗
lnGDPpc 0.015(0.035) lnGDPpc −0.014(0.008)∗
lnCO2pc 0.002(0.085) lnCO2pc −0.092(0.012)∗ ∗ ∗
lnLEI 6.428(1.262)∗ ∗ ∗ lnLEI 0.818(0.171)∗ ∗ ∗
lnEI 17.638(1.792)∗ ∗ ∗ lnEI −2.240(0.507)∗ ∗ ∗
lnCOR 0.136(0.076)∗ lnCOR 0.024(0.018)
∗∗∗ ∗∗
, , and ∗ show statistically significance at 1%, 5%, and 10% level, respectively.

iary infrastructure, such as roads networks, and maintenance of power 2017). This can be accomplished by training local investors on how to
grids (Ackah and Kizys, 2015). Electricity access due to renewable en- benefit from CDM credits and encouraging associations that aim at re-
ergy projects also open new markets in remote areas stimulating the ducing costs by joint procurement and marketing of finished products
economy by providing self-employment opportunities (Nyiwul, 2017). (e.g. in biofuels) (ENDEV, 2016; Gujba et al., 2012). Furthermore, in-
Policies that encourage deployment of off-grid renewables especially in troduction of carbon cap and trading system and renewable energy cer-
remote areas will stimulate the job sector in SSA. tificates should be promoted to increase the share of renewable energy
From our results, renewable energy consumption was statistically and efficiency of the energy sector (Pozlin et al., 2015). This will fur-
significant and correlated negatively with CO2 emissions per capita, ther enhance consumer participation in the energy market and provide
with one-unit change of lnCO2pc resulting in a decrease in 0.123 units much needed capital for further investments.
of renewable energy consumption in the long run estimates. Corre- Renewable energy consumption should result in relief on forest re-
spondingly, for the short run estimates all 14 SSA countries that had sources that are mainly used in providing traditional fuel in rural ar-
statistically significant relationships was negative. This was the ex- eas. Further, investments in renewable energy (especially wind, solar,
pected outcome and was consistent with the results from studies by hydroelectric, and modern biomass such as biofuels and biogas) will re-
Sardosky (2009), Ackah and Kizys (2015), and Marques et al. (2010), sult in a shift in the use of traditional biomass such as firewood and
which modeled the effect of CO2 emissions on renewable energy. In- charcoal that will relieve pressure on forests, thereby providing car-
terestingly, Silva et al. (2018) observed that the Kyoto protocol place bon offsets (Marques et al., 2010; Sardosky, 2009). Unsustainable use
less pressure on developing countries and could be interpreted to mean of traditional biomass for more than 75% of the household energy bal-
that SSA should not care about CO2 emissions on account of their devel- ance has resulted in environmental degradation of forestry resources
opment agenda. This was revised in the Paris climate deal where SSA (ENDEV, 2016; Mohammed et al., 2013). This has presented challenges
countries on their part must make a commitment to raise $3 million for biomass development in SSA, resulting in the need for a new image
per year and ensure transparency in the prospective funding for climate of biomass energy (Owen et al., 2013). Currently, biomass for electric-
change mitigation (Africa Renewal, 2016). ity production and as the source of transportation fuel has been un-
Contrary results from Apergis et al. (2018) suggested that a major- derutilized in SSA (da Silva et al., 2018). Solutions lie in moderniza-
ity of SSA countries may not have achieved the required level of GDP tion of production, processing, distribution, and consumption of biofuels
per capita that allows for reduced carbon emission levels. Studies by (Owen et al., 2013). In-order to achieve these goals, policy measures
Uzar (2020a) while explaining the grounds for the long run positive re- should include dissemination of information, streamlining regional
lationship between CO2 emissions and renewable energy consumption policy and standardization of biofuels, and strengthening of regional
argue that the threat of increasing CO2 levels has motivated the use economies (Marques et al., 2010; Owen et al., 2013). Promoting the
of renewable energy. Commitments from developed countries to help growth of non-food feedstocks such as jatropha, napier grass, rubber
developing countries mitigate the impact of climate change through in- seed oil, castor oil and switch grass, which thrive on marginal land can
ternational agreements such as the Kyoto protocol and Paris climate further protect environmental degradation and reclaim deforested envi-
deal (Uzar, 2020a). For example, developing countries are set to ben- ronments (Apergis et al., 2018).
efit from carbon markets that support mitigation and adaptation activ- Human Development Index (HDI) is quantitative composite measure
ities to the tune of US $100 billion per year (Africa Renewal, 2016; of human development for the countries well-being (UNDP 2018). HDI
Gujba et al., 2012). Despite this development, SSA benefits from only computes GDP per capita as a measure of quality of life, life expectancy
2.6% of Clean Development Mechanism (CDM) projects (Gujba et al., as a measure of health care and literacy rates as a measure of education
2012; Kreibich et al., 2017). Even so, SSA on their part should strive at (Owen et al., 2013). For this study, we separately used the two compo-
instituting policy measures that ensure renewable energy projects meet nents of HDI, that are education index (EI) computing school enrollment
the stringent requirement of CDMs (Gujba et al., 2012; Kreibich et al., and literacy rates as a measure of education, and life expectancy index

7
S. Oluoch, P. Lal and A. Susaeta Environmental Challenges 4 (2021) 100092

(LEI) a measure of the time an individual is expected to live in a given a negative effect on the provision of public goods (Aparicio et al., 2016;
demographic setting (Anglina et al., 2016; Mohammed et al., 2013; Bosco, 2016; Van Soest et al., 2016).
Mohammed et al., 2015). Renewable energy consumption was statisti- The control of corruption generated a positive impact on eco-
cally significant and positively correlated to EI in the long run, with one- nomic growth and prevented loosening of environmental policies
unit change in EI resulting in 0.111-unit rise in renewable energy con- (Aparico et al., 2016; Bosco, 2016; Van Soest et al., 2016; Uzar 2020a).
sumption. Only Ethiopia and Gabon show a positive and statistically sig- Dogmus and Nielsen (2020) case study of corruption in the hydropower
nificant relationship in the short run. Studies by Ergun et al. (2019) show sector in Bosnia and Herzegovina a transitional developing country, fur-
that SSA countries with higher HDI have a lower share of renewables in ther reveals how bureaucratic process in procurement, tendering and
the national grid. It is apparent that renewable energy has the potential managing hydropower projects has created a safe space for corrupt ac-
to increase education indexes in SSA but has been underutilized espe- tors (both government and private sector), that has resulted in unfin-
cially in countries that demonstrate higher HDIs. Measures that need to ished projects. Correspondingly, management of power utilities remains
be taken include using education as a medium through which renewable the focal point of the SSA energy crisis, mainly because utilities are
energy consumption can be increased, through media that highlight the mainly used for political patronage and vehicles of corruption especially
potential contribution of renewable energy to sustainable development in centralized government settings (APP, 2015; Mukasa et al., 2015).
and poverty alleviation especially in remote areas (Owen et al., 2013). Currently, many SSA power utilities recover only two thirds equivalent
Furthermore, the education curriculums should include renewable en- to 0.56% of SSA’s GDP of revenue required for sustainable operations,
ergy and energy conservation subjects’ in-order to promote knowledge resulting in cutbacks often disrupting the quality of service to existing
and awareness (APP, 2015). Direct benefits of renewable energy to the customers (APP, 2015; Eberhard and Shkaratan, 2012). For example,
education sector can be enhanced through introduction of solar panels the DR Congo has only 9% of the population with access to electricity is
and solar lanterns for schools in the remote areas (APP, 2015). an example of co-existence of great hydropower potential with extreme
Life expectancy index was statistically significant in the long run and energy poverty (APP, 2015). There needs to be key reforms in the energy
negatively correlated to renewable energy consumption, with one-unit sector that goes hand in hand with long-term national interest having
change in lnLEI resulting in 0.397 unit change in renewable energy con- priority over short term political gain, vested interests, corruption, and
sumption. On the other hand, in the short run lnLEI in Gabon, Kenya, political patronage (APP, 2015). These reforms could be in the form of
Malawi and Zambia, had a positive relationship with renewable energy privatization of utilities and additional oversight by the public and an
consumption. It should be apparent that an increased investment in re- improved process of transparency, in terms of documentation of pro-
newable energy technologies should result in an increase in energy ac- cesses that are open to further scrutiny through auditing mechanisms
cess and promote greater human development. Countries with greater (Dogmus and Nielsen, 2020).
life expectancy also show a greater willingness to invest in environmen-
tal quality (Charfeddine and Mrabet, 2017; Pirologea, 2012). However, 5. Conclusions
a counter argument is that in countries with high life expectancy, the
willingness to accumulate more physical and human capital increases re- Overall, by considering the specification and scenario analysis con-
sulting in increased environmental degradation (Charfeddine and Mra- ducted in the study, we found significant and substantive influence of
bet, 2017). Pirlogea (2012) investigated energy consumption and hu- renewable energy consumption on social, economic, and environmental
man development in developing countries and found that high values factors. In other words, renewable energy consumption plays a vital role
of HDI corresponded to greater energy consumption patterns. Clean in increasing GDP per capita, and education index, whereas it reduces
and reliable energy influences the determinants of human development carbon emissions, cost of living and life expectancy index in the long
such as education, health, environmental safety, and gender equality run. Our results suggest that SSA governments must encourage invest-
(Pirlogea, 2012). Apergis et al. (2018) further asserts that renewable ments in renewable energy to promote economic growth that is sustain-
energy can play a role in improving healthcare by reducing air pollu- able and environmentally friendly to reduce carbon emissions. Existing
tion levels and saving cost in health care expenditures by reducing fos- policies in SSA countries support fossil fuels often resulting in market
sil energy bills through solar installations at health facilities to assist in failure for renewables. With higher costs of renewables, long payback
running rural hospital equipment and lighting. periods and illiquid assets making renewables unattractive for investors
We expected that renewable energy consumption should result in a (Pozlin et al., 2015). Consequently, SSA governments have a role in pro-
positive increase in corruption perception index, as was the case in stud- viding tax breaks, grants, and subsidies to support renewables. Further-
ies by Vasylieva et al. (2019) investigated the impact on renewable en- more, introduction of government loans to private investors and local
ergy consumption on GDP and Corruption in European Union countries authorities; loans and grants from international partners can assist both
from 2000 to 2016. Correspondingly, Uzar (2020a) while investigating government and private sector in financing renewable energy projects.
the impact of income inequality on renewable energy consumption for Involvement of institutional investors such as banks, cooperatives, in-
43 developed and developing countries, found that corruption control vestment funds and insurance companies can further provide innovative
a proxy for institutional factors, positively affected renewable energy solutions for small grid renewables, stimulating local economic growth
consumption. While this outcome may hold for developed countries, in rural settlements, reducing the cost of energy, and providing access
our results show that the relationship between lnCOR, and renewable to energy. For example, a pay-per-use solar scheme in Kenya facilitat-
energy is positive but not statistically significant in the long run for ing small loans through mobile telecommunications company to rural
SSA countries. In the short run Cameroon, Congo Rep, Cote d’ Ivoire, residents for purchasing solar panels ensures participation of the final
Malawi and Tanzania had a negative relationship between InCOR and consumer in the energy market (Dahir et al., 2018).
renewable energy, while only Gabon and Namibia that had a positive Privatization measures of the energy market in state-controlled util-
relationship between corruption perception index and renewable energy ities will go hand in hand in promoting the much-needed efficiency and
consumption. Corruption can affect renewable energy consumption by providing accountability. Regional integration policies should encour-
translating to ineffective implementation of government programs that age trade between neighboring countries that have energy surpluses, to
may divert scarcely available resources to be invested in renewable en- enhance economic scale for supporting the viability of capital-intensive
ergy technologies. Studies by Zhang et al. (2016) reveal that corruption projects, stimulate economies and boost income. Stability and account-
has a negative effect on CO2 emissions in lower emission countries but ability in supporting institutions in energy markets can attract further
insignificant in higher emission countries and may have a positive in- investments in renewables. Management of public utilities requires good
direct effect mainly through its effect on GDP per capita. Other studies governance to provide a facilitative environment for implementation of
involving corruption perception index with economic growth revealed renewable energy projects. Implementation of best practices can be en-

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S. Oluoch, P. Lal and A. Susaeta Environmental Challenges 4 (2021) 100092

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Declaration of Competing Interest 101214.
Mohammed, Y.S., Mustafa, M.W., Bashir, N., 2013. Status of renewable energy consump-
tion and developmental challenges in Sub-Sahara Africa. Renew. Sustain. Energy Rev.
The authors declare that they have no known competing financial 27, 453–463.
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