The impact of forestation and renewable energy utilisation on environmental efficiency in Africa

Abstract

Achieving carbon neutrality is a tedious challenge confronting African countries that have witnessed mounting environmental degradation. Renewable energy consumption (REC) and forestation play a critical role in dealing with the situation. Therefore, to address this concern, this study assesses the dynamic energy or environmental efficiency of 43 sampled African countries by proffering a new dynamic meta-frontier DEA model from 2010 to 2018. The bootstrap truncation regression model investigates the influence of forestation and REC on environmental efficiency in Africa. The dynamic environmental efficiency of the 43 concerned African countries is low (0.59), indicating vast room for improvement. The heterogeneity of dynamic environmental efficiency across the income groups is evident. The upper-middle-income group (UMIG) had the best performance, followed by the low-middle-income group (LMIG) and the low-income group (LIG). The technology gap ratio also confirmed the existence of a huge gap across the income groups in Africa. The bootstrap truncation regression results confirmed a U-shaped relationship between economic growth and dynamic environmental efficiency in Africa. Forestation and REC positively correlate to dynamic CO2 emission and energy efficiency in Africa. In contrast, financial development is negatively associated with CO2 emissions and Africa’s energy efficiency. The study’s findings will aid the sampled African countries in their quest to attain carbon neutrality, thereby promoting sustainability on the African continent.