Economic growth, renewable energy consumption patterns, and environmental sustainability in Ghana: Testing the Environmental Kuznets Curve
Abstract
Global warming is mainly triggered by growing CO2 emissions, significantly jeopardizing environmental sustainability, economic stability, and human well-being worldwide. Emphasizing the EKC hypothesis, this study, using data from 1993–2020, exposes the intricate network of connections between Ghana’s energy use patterns, economic growth trajectories, and CO2 emissions. This paper extensively investigates these dynamic relationships utilizing advanced econometric techniques like the Autoregressive Distributed Lag (ARDL) model, Vector Error Correction Model (VECM), and Autoregressive Integrated Moving Average (ARIMA) models. The findings show a solid positive long-term connection between economic development and CO2 emissions, aligning with the EKC hypothesis’s first stage. Notably, by showing a significant short-term effect on reducing CO2 emissions, the study emphasizes the possibility of using renewable energy to shift towards a low-carbon economy. The VECM results corroborate the long-term equilibrium link between economic expansion and CO2 emissions, even if the ARIMA models indicate a continuous increase in emissions, emphasizing the urgent need for mitigation efforts. Because they stress the importance of promoting clean technologies, accelerating the usage of renewable energy, and promoting sustainable urbanization, the study’s results have substantial policy implications. Ghana can manage these intricate problems and support attaining the Sustainable Development Goals and a greener and more sustainable future using a comprehensive policy framework.
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