Carbon Dioxide Emissions from Electricity Power Generation and Economic Growth in South Africa

Abstract

This study analyses the relationship between CO2 emissions from electricity generation and economic growth in South Africa. The study utilises annual time series data spanning for the period from 1971 to 2014 sourced from the World Bank. The study employs a Vector Error Correction Model (VECM) to analyse the short run and long run relationships. Empirical results revealed that there is a negative statistically insignificant short run relationship and long run negative statistically significant relationship between CO2 emissions and economic growth in South Africa. The Granger causality results revealed noncausal relationship between CO2 and economic growth. The policy implication of this study is that Eskom and policy makers must propose and implement policies aimed at reducing CO2 emissions from electricity generation as it will improve economic growth in South Africa.

Renewable Electricity Consumption and Economic Growth: A Comparative Study of South Africa and Zimbabwe

“…A 1% increase in CO2 emissions in South Africa in the short run insignificantly result in economic growth declining by 22.02%, ceteris paribus. This is consistent with the results of Hlongwane and Daw (2022). However, a 1% increase in CO2 emissions in Zimbabwe in the short run will significantly result in economic growth rising by 74.42%, ceteris paribus.…”

“…The empirical model estimation utilised in the study was adopted from the studies of Khobai and Le Roux (2017), Stungwa et al (2022), Hlongwane and Daw (2021a) and Hlongwane and Daw (2021b). The study modifies this model to suit the study's main objective.…”