This study investigates the role of economic well-being and economic freedom as drivers of renewable energy consumption using the share of renewables in total energy consumption in Africa. To achieve this, the study employs a panel data of 32 African countries over the period 1996-2017. To deal with identification challenges associated with panel time-series data, we use the Dynamic Ordinary Least Squares econometric technique. As part of our findings, first, we have evidence that increasing economic well-being in Africa increases the share of renewables in total energy consumption to a point after which it turns negative (inverted U shape). Second, the disaggregated measures of economic freedom show that both property rights and tax burden decrease the share of renewables in total energy consumption. On the contrary, an increase in trade freedom and business freedom measures increases the share of renewables in total energy consumption. Toward the goal of promoting access to affordable, reliable, sustainable, and modern energy for all by 2030, governments in Africa should actively encourage trade freedom and business freedom to enhance the share of renewable energy consumption. Similarly, reducing the tax burden will promote the share of renewable energy consumption. Likewise, we call for further investigation into our evidence of a negative relationship between property rights and the share of renewables in total energy consumption.
Background: Ghana is bedeviled with the lack of 24-h supply of electricity. This holds back economic growth and sustainable development prospects. Several studies have investigated varied factors that account for household's willingness-to-pay (WTP) for improved electricity services. However, not much is known about the role of trust as a proxy for social capital and household's WTP for improved electricity services. We hypothesize that trust (social capital) is a key factor in determining households WTP for a 24-h supply of electricity in Ghana, a service which is largely controlled by the government.
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