Energy Consumption and Environmental Quality in Africa: Does Energy Efficiency Make Any Difference?

Abstract

In line with the quest by policymakers to reduce greenhouse gas emissions towards Agenda 2050 and environmental sustainability, this study examines whether in the remit of Sustainable Development Goal 7, energy efficiency plays a significant role in mitigating environmental concerns associated with energy consumption. We do this by drawing macro-data on 20 sub−Saharan African countries for the period 2000–2020. Evidence based on the dynamic Generalize Method of Moments estimator shows that although overall, energy consumption triggers remarkable environmental setbacks, renewable energy consumption shows a favourable environmental effect. The results further show that energy efficiency is both directly and indirectly effective for reducing environmental pollution. Notably, the study finds that energy efficiency interacts with energy consumption to yield marked greenhouse gas emission reductions measured against carbon and nitrous emissions. In particular, we find that while renewable energy is significant for propelling Africa towards environmental sustainability, non-renewable energy shows a harmful effect. We provide policy recommendations based on the finding that investments in energy efficiency and renewable energy provide solutions to maintaining environmental sustainability. African countries should strive to include renewable energy in their energy mix and improve investments in line with SDG7 and Aspiration 1.7 of Africa’s Agenda 2063.