Heterogeneous determinants of environmental sustainability: Assessing the roles of energy consumption, economic growth, and financial development

Odionye Joseph Chukwudi, Okorontah Chikeziem F., Uruakpa Chiagoziem Gospel, Okpara Roy M. and Uba Chiwuike N.

Economic Annals, 2024, vol. 69, issue 241, 65 - 93

Abstract: This study offers unique insights into the heterogeneous influence of energy consumption, economic growth, and financial development on environmental sustainability in Sub- Saharan African (SSA) countries. Basically, the scarcity of evidence on this issue, especially in the context of SSA, motivates this new assessment. Thus, on the basis of the annual panel series for 22 SSA countries over the period 1999-2019, the novel quantile-based method of moments (MM-QR), and system-generalisation method of moments (sysGMM) provide the following results. First, financial development significantly degrades the region’s environmental quality. Second, energy utilisation provides varying significant increasing effects. Whereas it largely increases carbon emissions at the upper quantiles, the influence at the middle and low quantiles is inconsequential. This highlights the fact that high levels of energy use in the region significantly increase carbon emissions, which in turn reduces the region’s environmental sustainability. Third, the empirical result confirms the inverted Uform hypothesis in the region. Policy options to enhance and maintain sustainable growth in the region without compromising environmental quality have been highlighted.

Keywords: environmental sustainability; economic growth; financial development; energy consumption; MM-QR; SSA (search for similar items in EconPapers)
JEL-codes: O4 Q4 Q5 (search for similar items in EconPapers)
Date: 2024
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