The conditioning role of institutions in the nonrenewable and renewable energy, trade openness, and sustainable environment nexuses: a roadmap towards sustainable development

Fengjiao Zhou (), Mohamad Shaharudin bin Samsurijan (), Ridwan Lanre Ibrahim () and Kazeem Bello Ajide ()
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Fengjiao Zhou: Universiti Sains Malaysia
Mohamad Shaharudin bin Samsurijan: Universiti Sains Malaysia
Ridwan Lanre Ibrahim: University of Lagos
Kazeem Bello Ajide: University of Lagos

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2024, vol. 26, issue 8, No 20, 19597-19626

Abstract: Abstract The unflinching upsurge in global warming has put the world into a state of disarray, and policymakers are not sure of what the future holds for the ecosystem. To get the global environment back on track of sustainability, efforts are relentlessly emanating from both developed and developing economies to identify the hindering and enhancing factors. Given the preceding narratives, this paper investigates the tripartite impacts of renewable and nonrenewable energy, trade openness, and institutions on sustainable environment in 54 African countries from 1996 to 2019. The study employs the two-step system generalized methods of moment (SYS-GMM) in estimating the effects of the regressors on four indicators of sustainable environment. Six findings are prominent from the study. First, nonrenewable energy (NRE) and trade openness (TO) hinder sustainable environment, while renewable energy enhances it. Second, the unconditional impacts of institutions drive the path to a sustainable environment. Third, the interaction of institutions with NRE and TO hinders sustainable environment. However, after conducting institutional enhancement estimations, the interactive terms became supportive of sustainable environment. Fourth, the thresholds are policy-relevant across the specifications. Specifically, a 31.11% utilization of nonrenewable energy and 43.75% openness to trade contribute to a sustainable environment. Sixth, the impacts of economic growth and its square empirically support the inverted U-shaped EKC. This study suggests the adoption of carbon-taxing on nonrenewable energy products, price-subsidization for renewable energy goods and services, and institutional quality reforms as pathways towards achieving a sustainable environment in Africa.

Keywords: Renewable energy; Nonrenewable energy; Trade openness; Institutions; Africa (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10668-023-03427-2

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