Energy efficiency, economic growth, and natural resource rent: A trilemma analysis of environmental sustainability in Africa

Mark Awe Tachega, Yanjiao Chen, George Kwame Agbanyo, Rizwan Ahmed, Augustine Appiah and Clement Mintah

Energy, 2024, vol. 307, issue C

Abstract: Climate change, exacerbated by a global economic model reliant on carbon-intensive industrialization and unchecked growth, disproportionately affects vulnerable regions such as Africa. Therefore, transitioning to an ecologically sustainable development paradigm is imperative for developing countries facing climate disruptions. The current study analyzes the trilemma effect of energy efficiency, economic growth, and total natural resource rent on environmental quality in Africa from 2010 to 2018 using SMB-DEA and PMG ARDL methods. The results are as follows: first, SMB-DEA analysis found traditional and renewable energy efficiency at 89 % and 58 %, respectively, indicating infrastructure and policy deficiencies in optimizing renewables. Second, economic expansion poses significant environmental costs; energy efficiency has an insignificant ameliorating effect on efficiency; and counterintuitively, natural resource rents become less environmentally harmful over time, though remain detrimental in the short term. Third, country-specific analyses presented heterogeneous outcomes, reflecting the complexity of global climate solutions. Fourth, transforming inefficient energy-growth-emission systems onto sustainable trajectories requires 262 % CO2 emission cuts and 46.7 % increased renewables capacity to reach efficiency frontiers. Fifth, Bidirectional causal relationships exist between income, energy efficiency, emissions, and resource rents, mutually influencing one another. These findings support suggestions for upscaling green energy capacity and improving green energy efficiency.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:307:y:2024:i:c:s0360544224024678

DOI: 10.1016/j.energy.2024.132693

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