Renewable energy consumption and economic growth: New evidence from Ghana

Whenever there is a question of environmental quality and economic prosperity, renewable energy consumption leads the debate. Ghana is a country blessed with a lot of renewable energy resources. However, Ghana depends on non-renewable energy to fuel its economy. This study investigates the direct im...

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Bibliographic Details
Published in:Energy (Oxford) 2022-06, Vol.248, p.123559, Article 123559
Main Authors: Gyimah, Justice, Yao, Xilong, Tachega, Mark Awe, Sam Hayford, Isaac, Opoku-Mensah, Evans
Format: Article
Language:English
Subjects:
Economic development
Economic growth
Economic models
Empirical analysis
Energy consumption
Energy resources
Energy sources
Environmental quality
GDP
Granger causality
Gross Domestic Product
Impact analysis
Mediation model
Renewable energy
Renewable resources
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Summary:Whenever there is a question of environmental quality and economic prosperity, renewable energy consumption leads the debate. Ghana is a country blessed with a lot of renewable energy resources. However, Ghana depends on non-renewable energy to fuel its economy. This study investigates the direct impact and indirect impact of renewable energy on economic growth using both the Granger causality and the mediation model in its analysis based on data from 1990 to 2015. The variables used for this research are renewable energy, the gross domestic product, foreign direct investment, gross capital formation, and trade. The outcome shows a feedback effect among economic growth and renewable energy consumption, but renewable energy consumption does not have a significant indirect impact on economic growth. Renewable energy has a significant total impact on economic growth. Therefore, the increase in renewable energy consumption has a total positive effect on economic growth. The empirical results of our study suggest that, the use of renewable energy should be encouraged to promote economic growth. •Renewable energy and economic growth in Ghana.•Renewable energy has a total indirect and direct impact on economic growth in Ghana.•Gross capital formation as a moderator has direct impact on economic growth in Ghana.•Renewable energy cause foreign direct investment in Ghana.•Economic growth cause renewable energy consumption in Ghana.
ISSN:0360-5442
1873-6785
DOI:10.1016/j.energy.2022.123559