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Corresponding Author:
Sheilla Nyasha, Department of Economics, University of South Africa, Pretoria, South Africa

Renewable Energy and Economic Growth in Zimbabwe: A Causal Perspective

October 17, 2023
JEL classification: Q40; Q20; O40
Keywords: Renewable Energy; Renewable Energy Consumption; Economic Growth; Granger-Causality; Zimbabwe

Abstract

The Granger-causality between renewable energy consumption and economic growth in Zimbabwe is empirically examined using the 1990-2019 time-series data. The study is motivated by the lack of empirical evidence on which variable drives the other in Zimbabwe – between renewable energy consumption and economic growth; and by the need to provide informed guidance to policy makers on whether the country’s drive towards cleaner sources of energy in combating global warming have spill over causal effects on economic growth. In an effort to address omitted-variable bias, the study used the autoregressive distributed lag bounds testing approach within a multivariate Granger-causality model. The results of the study confirm the presence of a Granger-causal relationship between renewable energy consumption and economic growth in Zimbabwe. However, this relationship is found to be time variant. While the results reveal the presence of bidirectional Granger-causality between renewable energy consumption and economic growth in the short run, in the long run, unidirectional Granger-causality from renewable energy consumption to economic growth is confirmed. These results establish that in Zimbabwe, energy conservation policies are detrimental to the national economic growth efforts. Policy makers are, therefore, recommended to draft pro-renewable energy policies as the outcome of such is not only reduced carbon footprint but also real sector stimulation.

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Renewable Energy and Economic Growth in Zimbabwe: A Causal Perspective

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Institute for International Economics of the Genoa Chamber of Commerce

Institute for International Economics
of the Genoa Chamber of Commerce