Investigating the Mediating Roles of Income Level and Technological Innovation in Africa’s Sustainability Pathways Amidst Energy Transition, Resource Abundance, and Financial Inclusion

Abstract

The global environment faces the issue of sustainability arising from the persistent growth rates in general production levels. Hence, there is the need to resolve the growth environment conflicts in order to enhance the sustainability of the current and future generations. This study presents the first empirical analysis on the dynamic impacts of non-renewable and renewable energy, total resource rents, population growth, human capital, and financial inclusion on environmental quality in Sub-Saharan Africa (SSA) with the conditioning roles of technological progress and income level. The empirical evidence is based on a two-step system generalized method of moments (SYS-GMM) with forward orthogonal deviations for 42 countries in the SSA region from 2004 to 2018. The following results are established from the empirical analyses. First, renewable energy emerges as a promoter of environmental quality through its reducing impacts on carbon emissions per capita (co2pc). Second, other regressors turn out to impede environmental quality by contributing to the surge in co2pc. Third, the robustness checks analyses, which consider different variants of carbon emissions as outcome variables, revealing that the main results are robust and empirically supported to explain the variations in the level of pollutants in the region. Fourth, the impacts of technological progress from both direct (unconditional) and interactive (conditional) angles mitigate co2pc while income promotes it. On the policy front, promoting investment in renewable energy and structuring human capital development plans to promote green growth are seen as sacrosanct towards achieving a sustainable environment in the region.