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

• Published in: Energies (Basel) Vol. 17; no. 15
• Main Authors: Kouassi, Verena Dominique, Xu, Hongyi, Bosah, Chukwunonso Philip, Ayimadu, Twum Edwin, Nadege, Mbula Ngoy
• Format: Journal Article
• Language: English
• Published: MDPI AG 01.08.2024
• Subjects: Alternative energy sources; China; Economic growth; Emissions (Pollution); Energy industry; Energy use; Environmental protection; Environmental sustainability; Foreign investments; Green technology; Growth; Kenya; Natural resources; Nigeria; China; Kenya; Nigeria
• ISSN: 1996-1073; 1996-1073
• DOI: 10.3390/en17153847

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[sub.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[sub.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[sub.2] in the long term. Also, foreign direct investment significantly promotes CO[sub.2] emissions. Secondly, the causality test shows a unidirectional causal relationship between CO[sub.2] emissions and foreign direct investment. The test also revealed a bidirectional relationship between GDP and CO[sub.2] emissions, as well as between energy consumption and CO[sub.2] emissions. Again, a bidirectional causation was observed between agricultural production and CO[sub.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[sub.2] across the continent and advocates for the judicious adoption of existing policy frameworks like the 2030 Agenda for environmental Sustainability.