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Sustainable Energy Usage for Africa: The Role of Foreign Direct Investment in Green Growth Practices to Mitigate CO 2 Emissions

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  • Verena Dominique Kouassi

    (School of Management, Wuhan University of Technology, Wuhan 430070, China)

  • Hongyi Xu

    (School of Management, Wuhan University of Technology, Wuhan 430070, China)

  • Chukwunonso Philip Bosah

    (School of Public Administration, China University of Geosciences, Wuhan 430074, China)

  • Twum Edwin Ayimadu

    (School of Resource and Environmental Science, Wuhan University, No. 299, Luoyu Road, Wuhan 430072, China)

  • Mbula Ngoy Nadege

    (Department of Exploration and Production, Faculty of Oil, Gas and Renewable Energies, University of Kinshasa, Kinshasa XI B.P.127, Democratic Republic of the Congo)

Abstract

In line with Africa’s commitment to keeping up with the United Nations Framework Convention on Climate Change, achieving a sustainable future requires balancing economic growth with environmental sustainability. This study investigates the long-term impacts of foreign direct investment, economic growth, agricultural production, and energy consumption on CO 2 emissions across 43 African nations from 1990 to 2021. Despite significant research on the individual effects of these factors, the combined influence on CO 2 emissions remains underexplored. Addressing this gap, this study employs cross-sectional augmented distributed lag estimators (CS-DL and AMG) and updated estimation packages to effectively examine the relationships between variables. Our findings are as follows: firstly, economic growth and energy use was shown to have a significant positive influence on CO 2 in the long term. Also, foreign direct investment significantly promotes CO 2 emissions. Secondly, the causality test shows a unidirectional causal relationship between CO 2 emissions and foreign direct investment. The test also revealed a bidirectional relationship between GDP and CO 2 emissions, as well as between energy consumption and CO 2 emissions. Again, a bidirectional causation was observed between agricultural production and CO 2 emissions. Thirdly, the impulse response analysis shows that GDP will contribute more to emissions over the 10-year forecast period. This study also proposes policy implications to lessen CO 2 across the continent and advocates for the judicious adoption of existing policy frameworks like the 2030 Agenda for environmental Sustainability.

Suggested Citation

  • Verena Dominique Kouassi & Hongyi Xu & Chukwunonso Philip Bosah & Twum Edwin Ayimadu & Mbula Ngoy Nadege, 2024. "Sustainable Energy Usage for Africa: The Role of Foreign Direct Investment in Green Growth Practices to Mitigate CO 2 Emissions," Energies, MDPI, vol. 17(15), pages 1-23, August.
    • Handle: RePEc:gam:jeners:v:17:y:2024:i:15:p:3847-:d:1449874
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