Sustainable Connection Amid Renewable Energy, Non-Renewable Energy Usage, and Economic Growth in South Africa

Abstract

Purpose

This paper assesses the relationship between renewable and non-renewable energy sources and economic growth in South Africa.

Methodology

The study employs the Vector Error Correction Model (VECM) and the Wald-Granger Causality Approach, utilizing data spanning the period from 1990 to 2020.

Findings

The findings reveal an absence of bidirectional Granger causality among the variables. The VECM results further indicate that, in the short run, imports (IMP) and non-renewable energy (NREN) have a slightly more pronounced impact on GDP growth than exports (EXP) and renewable energy (REN). In the long run, both imports and non-renewable energy significantly influence GDP growth more than renewable energy and exports.

Conclusion

In essence, strategic policies in the energy sector are imperative for ensuring a positive impact of energy consumption on the economy. Given the critical role of the energy sector, the South African government must implement policies conducive to enhancing the overall performance of the economy.