Renewable power generation and the environmental Kuznets Curve in South Africa

Modise, Motsei
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The Environmental Kuznets Curve (EKC) hypothesis states that there is an inverted U-shape relationship between economic growth and environmental degradation. South Africa is currently in the initial phase of renewed economic growth. Due to its historical reliance on coal for power generation, the country is also among the highest carbon dioxide emitters globally. There is a wide range of existing literature investigating the presence of the EKC in South Africa with other independent explanatory variables such as energy consumption, financial development, and globalisation added to the investigation. However, few studies have included total renewable power generation for South Africa in their assessments. This paper sought to investigate the causal relationship between carbon dioxide emissions, economic growth, and total renewable power generation for South Africa within the EKC framework. Time series data for the period 1997-2018, collected from secondary public sources, was analysed for this study. From the regression model, it was deduced that there is no presence of the EKC theory for the period under study. A unit root test was performed using the Augmented Dickey Fuller test, and it was found that all variables were integrated at the order of 1, GDP was also found to be stationary at level. The results from the Autoregressive Distributed Lag (ARDL) approach proved that there is co-integration between carbon dioxide emissions, economic growth, and total renewable power generation. The Granger Causality test showed a unidirectional relationship from carbon dioxide emissions, no causal relationship from economic growth to total renewable power generation and total renewable power generation and CO2 emissions. The results indicated that total renewable power generation had a low significant direct impact on carbon dioxide emissions reduction. The current low proportion of renewable energy sources in the total energy mix led to the finding that there was no meaningful reduction in carbon dioxide emissions. This paper proposed the implementation of efficient and powerful policies geared towards reducing South Africa’s carbon footprint without causing a negative impact on economic growth in the process
A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Management in Energy Leadership, 2021