Carbon Intensity, Renewable Energy and Economic Growth in Selected SADC Countries: Implications for a Just Energy Transition

Abstract

This study determined the impact of carbon intensity on economic growth in selected SADC countries (South Africa, Botswana, Namibia, and Mozambique). Carbon intensity was defined as carbon emissions per unit of GDP, while the analysis controlled for other traditional inputs (labour, gross capital formation, and renewable energy consumption). The study provides insight into how the transition to a green economy may affect economic growth as a just development goal for SADC countries. The impact of carbon intensity on economic output was estimated within a panel-data regression framework covering the four countries from 1998 to 2020. A Swamy random coefficient regression approach was used to control for slope heterogeneity and estimate cross-section-specific slope parameters. The results showed that carbon intensity had no statistically significant impact on economic growth in South Africa. In Botswana and Namibia, carbon intensity had a negative and statistically significant impact in Model 3, while in Mozambique it had a negative and statistically significant impact in Model 4. Renewable energy consumption had a positive and statistically significant impact on economic growth in South Africa, Namibia, and Botswana. In Mozambique, however, renewable energy consumption had a negative and statistically significant impact on economic growth, largely because of the inefficient use of biomass and waste in supporting sustainable growth. Accordingly, the study provides country-specific policy recommendations, including the accelerated adoption of environmentally friendly production methods and policies that support economic growth in the selected countries.