Can public–private partnership investment in energy (PPPI) mitigate CO2 emissions in South Africa? Fresh evidence from the novel dynamic ARDL simulations approach

Abstract

Global warming presents a worrisome condition that necessitates important actions across the planet. One promising strategy is encouraging investments through public–private partnership investment (PPPI) in green ventures. The Environmental Kuznets Curve (EKC) hypothesis framework is used in the current study to examine the relationship between the aforementioned factor and the level of carbon dioxide (CO2) emissions in South Africa between 1960 and 2020. Using the recently developed novel dynamic autoregressive distributed lag (ARDL) simulations framework, the results showed that (i) public–private partnership investment in energy contribute to deteriorating environmental quality; (ii) while the technique effect (TE) improves environmental quality, the scale effect (SE) largely contributes to escalating CO2 emissions, thus confirming that the EKC hypothesis holds; iii) energy consumption, foreign direct investment, trade openness, and industrial growth escalate CO2 emissions, but technological innovation reduces it; and iv) public–private partnership investment in energy, technological innovation, scale effect, technique effect, foreign direct investment, energy consumption, industrial growth, and trade openness Granger-cause CO2 emissions in the short, medium, and long run, showing that these variables are fundamental to determining environmental quality. Our empirical findings suggest that PPPIs should be accomplished in environmentally friendly sectors and industries, and South Africa’s government and policymakers should take further initiatives to ensure the implementation of policies that enable the change from non-renewable energy sources to renewable ones to promote efficiency in the production processes and curtail CO2 emissions in the country.