Do Globalization and Economic Development Promote Renewable Energy Use in Ghana?

Abstract

The fight against global warming has been a global battle. Environmental sustainability and a sustainable economy have been a concern for many nations, government organizations, and non-government organizations. Therefore, it is highly recommended to investigate the factors that lead to carbon emissions and how the world could overcome them. This study uses GMM and FMOLS to analyze the contribution of globalization which is measured as foreign direct investment and trade openness, economic development, and population growth towards the use of renewable energy. The period under study is from 1990 to 2015. The result of the study indicates trade openness helps promote the use of renewable energy. A 1% increase in trade openness would raise renewable energy consumption by 39%. However, foreign direct investment does not motivate the use of renewable energy, and economic development does not add to renewable energy consumption. Population growth helps promote renewable energy usage. The government of Ghana has to restrict its environmental regulations to protect the environment from foreign investors.