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The causal links between renewable electricity generation and economic growth in South Africa

Author

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  • Hlalefang Khobai

    (Department of Economics, Nelson Mandela University)

Abstract

Knowledge of the direction of causality between electricity generation from renewables and economic growth is essential if energy policies which will support economic growth of the country are to be devised. This study explores the causal relationship between electricity generated from the renewables and economic growth in South Africa using carbon dioxide emissions, employment and capital as the additional variables. The study uses the Johansen co-integration model to detect the long run relationship between the variables and the Vector Error Correction Model (VECM) to determine the direction of causality. The findings from Johansen co-integration evidenced a long run relationship between electricity generated from renewables, economic growth, carbon dioxide emissions, employment and capital. The VECM revealed unidirectional causality running from electricity generated from renewables to economic growth. The findings indicate that electricity generation from renewables enhance economic growth. Therefore, the government should make appropriate efforts to select energy policies that do not negatively affect economic growth.

Suggested Citation

  • Hlalefang Khobai, 2018. "The causal links between renewable electricity generation and economic growth in South Africa," Working Papers 1821, Department of Economics, Nelson Mandela University.
    • Handle: RePEc:mnd:wpaper:1821
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Hlongwane, Nyiko Worship & Daw, Olebogeng David, 2021. "An increase of electricity generation can lead to economic growth in South Africa," MPRA Paper 111018, University Library of Munich, Germany.
    2. Nyiko Worship Hlongwane & Olebogeng David Daw, 2023. "Electricity Consumption and Population Growth in South Africa: A Panel Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 13(3), pages 374-383, May.
    3. Hlongwane, Nyiko Worship & Daw, Olebogeng David, 2022. "Renewable electricity consumption and economic growth: A comparative study of South Africa and Zimbabwe," MPRA Paper 115154, University Library of Munich, Germany, revised 24 Oct 2022.
    4. John MacCarthy & Paul Muda & Prince Sunu, 2022. "Tax Revenue and Economic Growth Nexus in Ghana: Co-integration and Granger causality Test," Bulletin of Applied Economics, Risk Market Journals, vol. 9(2), pages 15-35.
    5. Hlongwane, Nyiko Worship & Daw, Olebogeng David, 2021. "The challenges and opportunities of electricity generation on economic growth in South Africa: An ARDL approach," MPRA Paper 110963, University Library of Munich, Germany.
    6. Samuel David Adebisi & Raymond Osi Alenoghena & Ayobola Olufolake Charles, 2023. "Impact of Energy Supply on Economic Growth in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(2), pages 959-969, February.
    7. Hlongwane, Nyiko Worship & Daw, Olebogeng David, 2022. "Electricity consumption and population growth in South Africa: A panel approach," MPRA Paper 113828, University Library of Munich, Germany.
    8. Garidzirai Rufaro & Muzindutsi Paul-Francois, 2020. "A Panel ARDL Analsis of the Productivity of Key Economic Sectors Contributing to Local Economic Growth in an Emerging Country," Studia Universitatis Babeș-Bolyai Oeconomica, Sciendo, vol. 65(1), pages 39-53, April.
    9. Nyiko Worship Hlongwane & Olebogeng David Daw, 2023. "Renewable Electricity Consumption and Economic Growth: A Comparative Study of South Africa and Zimbabwe," International Journal of Energy Economics and Policy, Econjournals, vol. 13(3), pages 197-206, May.
    10. Nyiko Worship Hlongwane & Olebogeng David Daw, 2022. "The Challenges and Opportunities of Electricity Generation on Economic Growth in South Africa: An ARDL Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 12(2), pages 164-174, March.

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    More about this item

    Keywords

    Electricity generation; carbon dioxide emissions; economic growth;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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