Growing green: enablers and barriers for Africa

Discussions about green growth transition in Africa have mostly been silent on quantifying Africa’s progress and assessing countries’ “green" versus “brown" growth performance. We construct a measure of Africa’s green growth performance using an emissions-adjusted production technology framework that jointly accounts for the production of desirable and undesirable outputs over the period 2000–2019, and identify the important country-level characteristics that drive green productivity growth. The Malmquist-Luenberger productivity index is consistent with concerns of climate change as it penalize countries for the production of “bad" outputs and credit countries for the reduction in emissions and production of “good" outputs, which is the desirable direction of economic development. Our main results indicate that Africa’s productivity growth is overstated when undesirable outputs are ignored in the measurement of Africa’s growth performance. Second, it is technological progress, and not efficiency change—i.e., the catch-up effect—that has been the primary source of Africa’s green economy transition, implying a reduction in the gap to the technological frontier for most countries. Our analysis of the determinants of green growth shows that high-income level, trade-embodied R&D, and domestic R&D are the main enablers of green growth, while high energy intensity is the main barrier to green productivity growth. We also find evidence of nonlinearities between income level and green growth performance, consistent with the environmental Kuznets curve hypothesis.