Impact of green energy, strategic commodities and economic policy uncertainty towards environmental sustainability for Sub-Saharan Africa

Abstract

The Sub-Saharan Africa (SSA) region is facing environmental sustainability challenges due to its abundant reserves of strategic commodities like crude oil and gold. These commodities significantly contribute to economic growth through their extraction and export to the global commodity market, but this economic dividend comes at the cost of environmental degradation. The present study explores the SSA region from the dimension of environmental sustainability, as it has received very limited research attention. It empirically investigates the interrelationships between commodity prices, economic policy uncertainty, renewable energy consumption (green energy), and carbon emissions across 39 SSA countries from 1996 to 2022. The study uses the second-generation panel econometrics method, the Augmented Mean Group technique, for the primary estimation. It also uses the two-step system Generalized Method of Moments (GMM) and FMOLS for robustness. The present study validates the Environmental Kuznets Curve hypothesis and provides new insights into the environmental dynamics of the SSA region. The study findings show that strategic commodities drive the region's environmental crisis, while green energy consumption and economic policy stability promote sustainability. It suggests that SSA countries should focus on controlling illegal mining and exploration activities while accelerating investments in green energy to mitigate environmental deterioration. This research study makes policy recommendations to achieve sustainable development while balancing economic growth and environmental protection.