Renewable energy transition and green productivity growth in sub‐Saharan African countries: A convergence analysis

Abstract

AbstractClimate change is one of the main issues facing countries in sub‐Saharan Africa. Improving green productivity is essential for transitioning to low‐carbon economies and mitigating climate change in this region. The existing literature does not emphasise the role of the energy transition in green productivity growth. Yet this analysis is important given the essential role of energy in the production process and the high endowment of renewable energy sources in the area. Thus, this paper contributes to the literature by examining the effect of the renewable energy transition on green productivity growth through a convergence analysis for 35 sub‐Saharan African countries from 2000 to 2020. The results of the logt test reveal the existence of three main convergence clubs in terms of green productivity. The first club with low productivity is made up of 23 countries, the second club with average productivity contains 8 countries, and the third club with high productivity comprises 3 countries, while 1 country is divergent. The renewable energy transition is a determining factor in the formation of these convergence clubs. Indeed, the results of the ordered logit regression show that an increase in the level of the renewable energy transition has a positive impact on the probability of countries joining convergence clubs with higher green productivity. Further analysis with the Generalized Method of Moment (GMM) reveals that the critical threshold for renewable energy share in the energy mix that allows countries to converge globally toward the green productivity frontier in the long term is 32.63%. Regarding policy implications, the results highlight the need to encourage the renewable energy transition to increase green productivity in sub‐Saharan African countries. This could involve strengthening policies to promote investment in the sector (creation of green funds and/or tax incentives) and subsidies for renewable energy consumption.