Investigating green energy–environment nexus in post‐COP26 era: Can technological innovation, financial development and government expenditure deliver Africa's targets?

Yixuan Wang, Ridwan Lanre Ibrahim, David Mautin Oke and Mamdouh Abdulaziz Saleh Al‐Faryan

International Journal of Finance & Economics, 2024, vol. 29, issue 3, 3263-3285

Abstract: Global warming remains one of the most topical issues in environmental debates because of its unimaginable ecological complications and threats to human existence. The determination to curtail the unwavering ravaging impacts of global warming motivates the 26th edition of the Conference of the Parties (COP26). Hence, this study examines explicitly how prominent factors discussed at COP26, such as technological innovation and green energy, will enhance the deliverance of the targets for Africa. While capturing environmental sustainability with CO2 emissions and ecological footprint, the empirical model endogenizes structural change, government expenditures and financial development from 1990 to 2018. The verification of stated hypotheses relies on the cross‐sectional autoregressive distributed lag (CS‐ARDL) model, augmented mean group (AMG), common correlated effects mean group (CCEMG) and method of moment quantile regression (MMQR) model. Our empirical results reveal that technological innovation, green energy and service‐led growth promote environmental sustainability by mitigating the surge in CO2 emissions and ecological footprint. Besides, government expenditures, financial development, agriculture and manufacturing hinder environmental sustainability. Policies that promote sustainable ecosystem in Africa are suggested based on empirical findings.

Date: 2024
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