Re-visiting the renewable energy–economic growth nexus: Empirical evidence from African OPEC countries

Abstract

Purpose

This paper aims to investigate the dynamic relationship between renewable energy and economic growth in African OPEC member countries (Angola, Algeria and Nigeria).

Design/methodology/approach

The fully modified ordinary least squares technique for heterogeneous cointegrated panels (Pedroni, 2000) is used to estimate the parameters of the model.

Findings

The study revealed four main findings. First, there is a bidirectional causality between renewable energy and economic growth in the long and the short run. Second, a bidirectional causality exists between non-renewable energy and economic growth in the short and long run. Third, a bidirectional causality exists between CO₂ emissions and economic growth. Fourth, a unidirectional causality was also found between CO₂ emissions and non-renewable energy consumption with the direction of causality stemming from the consumption of non-renewable energy to CO₂ emissions.

Practical implications

Because renewable consumption enhances growth, OPEC-member Africa countries should encourage investment in modern renewable sources that has high conversion efficiency such as solar, wind and hydro to strengthen their response to mitigating the impacts of climate change.

Originality/value

This study applies multiple methods to analyze the relationship between renewable energy and economic growth in African OPEC countries.

Citation

Alabi, O., Ackah, I. and Lartey, A. (2017), "Re-visiting the renewable energy–economic growth nexus: Empirical evidence from African OPEC countries", International Journal of Energy Sector Management, Vol. 11 No. 3, pp. 387-403. https://doi.org/10.1108/IJESM-07-2016-0002