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Energy Consumption, Capital Investment and Environmental Degradation: The African Experience

Author

Listed:
  • Ekundayo P. Mesagan

    (Pan Atlantic University, Lagos, Nigeria.)

  • Chidi N. Olunkwa

    (University of Lagos, Nigeria)

Abstract

This study investigates the effects of energy consumption and capital investment on environmental degradation in selected African countries between 1981 and 2017 using panel cointegration approaches. The Fully Modified and the Dynamic Ordinary Least Squares results affirm that energy consumption positively affects carbon emissions in Algeria, Nigeria, Morocco, and in the panel. At the same time, both also confirm that capital investment positively and significantly impacts carbon emissions in the region. Again, results show that capital investment augments energy use to reduce carbon emissions in Africa significantly. This implies that capital investment can provide needed impetus to reduce environmental degradation in the continent. The study, therefore, recommends that African countries should focus on energy conservation policies to reduce the adverse effect of energy use on carbon emissions.

Suggested Citation

  • Ekundayo P. Mesagan & Chidi N. Olunkwa, 2020. "Energy Consumption, Capital Investment and Environmental Degradation: The African Experience," Working Papers 20/022, European Xtramile Centre of African Studies (EXCAS).
    • Handle: RePEc:exs:wpaper:20/022
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    9. Ekundayo P. Mesagan & Wakeel A. Isola & Kazeem B. Ajide, 2019. "The capital investment channel of environmental improvement: evidence from BRICS," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 21(4), pages 1561-1582, August.
    10. Ekundayo Peter Mesagan & Mike I. Nwachukwu, 2018. "Determinants of Environmental Quality in Nigeria: Assessing the Role of Financial Development," Econometric Research in Finance, SGH Warsaw School of Economics, Collegium of Economic Analysis, vol. 3(1), pages 55-78, September.
    11. Isola Wakeel Atanda & Mesagan Ekundayo Peter & Alimi Olorunfemi Yasiru, 2017. "Energy Crisis in Nigeria: Evidence from Lagos State," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 23-28, December.
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    Cited by:

    1. Mesagan, Ekundayo Peter & Olunkwa, Chidi Ndubuisi, 2022. "Heterogeneous analysis of energy consumption, financial development, and pollution in Africa: The relevance of regulatory quality," Utilities Policy, Elsevier, vol. 74(C).
    2. Radoslaw Miskiewicz, 2022. "Clean and Affordable Energy within Sustainable Development Goals: The Role of Governance Digitalization," Energies, MDPI, vol. 15(24), pages 1-17, December.
    3. Katarzyna Grondys & Armenia Androniceanu & Zdzisława Dacko-Pikiewicz, 2020. "Energy Management in the Operation of Enterprises in the Light of the Applicable Provisions of the Energy Efficiency Directive (2012/27/EU)," Energies, MDPI, vol. 13(17), pages 1-16, August.
    4. Qingqing Zhao & Xintao Li & Siqi Li, 2023. "Analyzing the Relationship between Digital Transformation Strategy and ESG Performance in Large Manufacturing Enterprises: The Mediating Role of Green Innovation," Sustainability, MDPI, vol. 15(13), pages 1-22, June.
    5. Oleksii Lyulyov & Tetyana Pimonenko & Alfonso Infante-Moro & Aleksy Kwilinski, 2024. "Perception of Artificial Intelligence: GSR Analysis and Face Detection," Virtual Economics, The London Academy of Science and Business, vol. 7(2), pages 7-30, June.
    6. Aleksy Kwilinski & Oleksii Lyulyov & Tetyana Pimonenko, 2024. "Energy Poverty and Democratic Values: A European Perspective," Energies, MDPI, vol. 17(12), pages 1-23, June.
    7. Yin, Dehong & Zhao, Lihua, 2024. "Exploring the relationship among public strategies and natural resource efficiency for green economic recovery," Resources Policy, Elsevier, vol. 92(C).
    8. Ekundayo P. Mesagan & Titilope C. Adewuyi & Olugbenga Olaoye, 2022. "Corporate Finance, Industrial Performance and Environment in Africa: Lessons for Policy," Working Papers of the African Governance and Development Institute. 22/026, African Governance and Development Institute..
    9. Henryk Dzwigol & Aleksy Kwilinski & Oleksii Lyulyov & Tetyana Pimonenko, 2023. "The Role of Environmental Regulations, Renewable Energy, and Energy Efficiency in Finding the Path to Green Economic Growth," Energies, MDPI, vol. 16(7), pages 1-18, March.
    10. Olugbenga Olaoye & Risikat O.S Dauda, 2022. "Energy Use, Financial Development and Pollution in Selected African Countries," Journal of Economic Impact, Science Impact Publishers, vol. 4(3), pages 188-195.
    11. E P Mesagan, 2021. "Efficiency of Financial Integration, Foreign Direct Investment and Output Growth: Policy Options for Pollution Abatement in Africa," Economic Issues Journal Articles, Economic Issues, vol. 26(1), pages 1-19, March.
    12. Ekundayo Peter Mesagan, 2022. "Environmental Sustainability in Sub-Saharan Africa: the Case of Production and Consumption Activities," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(4), pages 2840-2867, December.
    13. Muhammad Ramzan & Ummara Razi & Muhammad Umer Quddoos & Tomiwa Sunday Adebayo, 2023. "Do green innovation and financial globalization contribute to the ecological sustainability and energy transition in the United Kingdom? Policy insights from a bootstrap rolling window approach," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 393-414, February.

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    More about this item

    Keywords

    Electricity Consumption; Capital investment; Environmental Degradation; Africa;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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