The influence of renewable energy use, human capital, and trade on environmental quality in South Africa: multiple structural breaks cointegration approach [Erratum: March 2021, v.28(11), p.13175]
2021
Iorember, Paul Terhemba | Jelilov, Gylych | Usman, Ojonugwa | Işık, Abdurrahman | Çelik, Bilal
Recent economic and environmental literature suggests that the current state of energy use in South Africa amidst rapid growing population is unsustainable. Researchers in this area mostly focus on the effect of fossil energy use on carbon (CO₂) emission, which represents only an aspect of environmental quality. In contrast, the current study evaluates the influence of renewable energy use, human capital, and trade on ecological footprint––a more comprehensive measure of environmental quality. To this end, the study employs multiple structural breaks cointegration tests (Maki cointegration tests), dynamic unrestricted error correction model through Autoregressive Distributed Lag (ARDL) model, and VECM Granger causality tests. The results of the Maki cointegration tests reveal the existence of a cointegration between the variables in all the models with evidence of multiple structural breaks. Further, the ARDL results divulge that an increase in renewable energy use, human capital, and trade improves environmental quality through a decrease in ecological footprint, while an increase in income stimulates ecological footprint. Moreover, causal relationship is found, running from all the variables to renewable energy and trade flow in the long run, while in the short run, economic growth causes ecological footprint. Trade is found to Granger-cause human capital, while human capital causes renewable energy. Additionally, human capital, renewable energy, and economic growth are predictors of trade. The study therefore recommends South African policymakers to consider the importance of renewable energy, human capital development, and trade as a policy option to reduce ecological footprint and improve environmental quality.
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