The Effect of Socio-Economic and Energy-Related Factors on Environmental Degradation in South Africa: An Autoregressive Distributed Lag Model Approach

Abstract

Over the past two decades, the world has experienced significant and relentless increase in environmental degradation, measured through carbon emissions (CO2). These emissions have been one of the persistent global concerns. South Africa boosts abundance of natural resources and some of the world’s most substantial mineral deposits endowment in the form of precious metals, diamonds and gold. The paper aims to examine impact of socio-economic and energy-related factors on environmental degradation from South African perspective. Using multivariate annual data spanning from 1991 to 2022, Autoregressive Distributed Lag Model (ADRL) was employed to determine both short-run and long-run impact of financial development (FD), renewable energy(RE), non-renewable energy (NRE), unemployment rate (UNE), economic growth (GDPPC), and population growth (PoPG) on CO2 emission. The results show that FD, RE, GDPPC, and PoPG promote environmental quality in the long run while NRE has opposite impact. The study thus calls for actions by relevant policymakers to stimulate economic growth and promote access to climate change finance, thereby encouraging investment in green energy technologies and consumption, to enhance and promote environmental quality in South Africa