Energy efficiency and greenhouse gas emissions: A panel ARDL model of top five emitters in Africa

Abstract

The Paris Agreement has mandated drastic decarbonization by developed and developing economies. Many of the top African emitters are now exploring drastic restructuring of the production processes in a way that promotes energy utilization efficiency. This is critical for ensuring an environmentally benign growth process. This study presents a unique addition to the body of existing knowledge by analysing the effect of some indicators of energy efficiency on three in dicators of environmental quality among the top five emitters of GHG in Africa. The data were from the World Development Indicators (WDI), covering the 1990-2020 periods for South Africa, Egypt, Nigeria, Algeria, and Libya. The panel Autoregressive Distributed Lag (ARDL) model was used for data analysis. The results showed that all the included series were stationary at first difference. The optimum lag lengths were determined independently in STATA 17 software, and the most frequent lags across the countries were selected. The Hausman test revealed that the pooled mean group (PMG) estimation was preferred to other estimators. The results showed that in the long-run, particulate emission damages, CO 2 intensity, and energy use intensity positively impacted GHG emissions, while GDP per capita and renewable energy utilization produced mixed results. In the short run, the error correction mechanism parameters were all significant (p <0.01) in Libya for all emission indicators, while Algeria showed significance (p < 0.01) in total GHG and CO 2 per capita models. The coefficient of particulate emission damages significantly reduced (p < 0.01) total GHG emissions in Libya and Nigeria and renewable energy significantly increased (p < 0.01) GHG emissions in South Africa but reduced them in Nigeria. Also, CO 2 emission intensity significantly (p < 0.01) and positively impacted GHG emissions in South Africa, Egypt, Libya, and Nigeria, while electricity power transmission losses increased total emissions and CO 2 emissions in Libya and Algeria. It was concluded that initiatives to reduce GHG emissions should focus on developing countries' sensitivity to emission damages, and promotion of initiatives for using renewable energies. Also, promotion of energy efficiency across industries offers a prospect for ensuring environmental sustainability.