The Implications of Renewable and Non-renewable Energy Generating in Sub-Saharan Africa: The Role of Economic Policy Uncertainties.

Abstract

Sub-Saharan Africa which is one of the main regions known for various sources of mineral and energy resources in the global market has experienced appreciable rates of economic expansion in the last 10 years. However, apart from the environmental consequences of generating energy, how uncertainties in the economy moderate the impact of energy generation on the environment is yet to be given desired attention. Hence, this study investigates the role of economic policy uncertainty in the energy-growth-emissions nexus for 32 countries in Sub-Saharan Africa over the period from 1996 to 2014. Results from one-step system-GMM show that real GDP and generation of non-renewable energy both increases CO2 emissions. However, while economic policy uncertainty also propels high levels of emissions in the region, its moderation effect on the impact of both renewable and non-renewable energy generation leads to a reduction in emissions level in the region. This suggests an urgent need for the implementation of sound macroeconomic and energy policies in Sub-Saharan Africa to safeguard the energy sector from disruptions and to mitigate the resultant impact on the degradation of the environment in the region.