What determines renewable energy consumption? Startling evidence from Ghana

Abstract

Purpose Owing to the adverse effect of carbon dioxide emission, there have been calls for economies to rely on (cleaner) renewable energy. Although empirical studies on the subject matter abound the conflicting outcome, the less attention paid to combustible renewable and waste, and the little empirical evidence of the effect of financial development and industrialization on renewable energy consumption necessitate further studies. This study aims to examine the drivers of renewable energy consumption for Ghana whose share of renewable energy consumption in the total energy consumption has been reducing over the past decade, with fossil fuel consumption remaining high. Design/methodology/approach Based on the demand theory and empirical studies, the paper models total renewable energy consumption and combustible renewables and waste as a function of income, price, financial development and industrialization. Regression and variance decomposition techniques were used to analyze the data. Findings Ghana’s renewable energy consumption is positively influenced by industrialization, but negatively influenced by price, income and financial development in the long run, while in the short run, industrialization and financial development affect renewable energy consumption. Research limitations/implications The findings imply that the transition to cleaner energy is not a matter of income level alone. Future research should investigate the drivers of other renewable energy consumption and the possible challenges to green finance in Ghana’s financial sector. Originality/value The effect of financial development and industrialization on renewable energy consumption is examined. Previous econometric analyses have also focused on total renewable energy, but this study adds combustible renewable and waste to the analysis.

Financial development and renewable energy consumption in Nigeria

“…This work improves upon these studies by establishing a direct interaction between financial development and renewable energy use. Other improvements are represented by the application of contemporary econometric techniques to capture the intervening effects of reforms and policies in a dynamic Nigerian environment, updating the data scope, utilizing the renewable energy portion of total final energy consumption to proxy renewable energy consumption as advocated by Lin et al (2016), Asongu et al (2019), Kwakwa (2020). Fourth, given the likely susceptibility of renewable energy use to economic and non-economic shocks in Nigeria, this study uniquely accounts for structural breaks by employing the Zivot-Andrew test.…”

Financial development and natural resources nexus in Egypt: the role of clean energy sources and foreign direct investment

“…Although several authors are concerned with the effect of financial development on renewable or clean energy (Brunnschweiler, 2010;Best, 2017;Anton and Nucu, 2020;Kwakwa, 2020a;Raza et al, 2020) no attention was given to studying the effect of CE on financial development. So, our study will not only try to reduce the gap by exploring the natural resource-development nexus but also aims at investigating the effect of crucial variables (FDI, education and clean energy sources) on financial development.…”

“…But before conducting the ARDL approach, we will first test the stationary of our variables by conducting Augmented Dickey–Fuller (ADF), the Phillips–Perron (PP) and Kwiatkowski–Phillips–Schmidt–Shin (Dickey and Fuller, 1979; Phillips and Perron, 1988; Kwiatkowski et al , 1992) to avoid the possibility of the existence of biased regression and to ensure that none of the variables is stationary at the second difference.…”

“…Second, two important variables are included in the model which is clean energy sources (CE) and FDI and so far, as we are aware, no empirical study before assessed the impact of clean energy on financial development. Instead, previous studies assessed the impact of financial development on cleaner energy sources (Anton and Nucu, 2020;Kwakwa, 2020a). Third, policy implications may be crucial to policymakers concerning enhancing financial development to achieve economic progress.…”

An Empirical Study of Renewable Energy Technology Acceptance in Ghana Using an Extended Technology Acceptance Model

“…Many fundamental human needs are met by energy, especially fire, mechanical strength, and light. Energy research has accelerated in response to the need to reduce carbon emissions [2]. A greater percentage of the energy consumed worldwide is derived from conventional nonrenewable energy resources, such as oil, gas, and coal.…”