Economic freedom, energy transition, and environmental sustainability in sub-Saharan Africa: assessing the region’s load capacity factor and ecological footprint

Abstract

Energy transition has been touted as a viable solution to mitigate the menace of climate change in sub-Saharan Africa (SSA). However, this study argues that energy transition is necessary but not sufficient in the absence of inclusivity and economic freedom, which guarantees property rights, government integrity, business freedom, monetary freedom, and investment freedom. Therefore, this study looks at how energy transition and inclusive growth affect the load capacity factor (LCF) and ecological footprint (EFP) in SSA countries from 2000 to 2023, while also considering economic freedom. The findings from the method of moment quantile regression suggest that energy transition and economic freedom boost ecological sustainability in SSA by increasing the LCF and alleviating the EFP, while inclusive growth is not yet at a desirable level capable of mitigating ecological deterioration in the region. Conversely, urbanisation does not appear to be a problem in both models, which could be attributed to the fact that the region has less than 40% of its population living in the urban centers. However, trade has no detrimental effect on the environment when the demand and supply-sides of ecological deterioration are considered. The findings remain robust when the LCF is replaced with the EFP and across alternative estimation techniques. In line with these findings, policymakers are required to improve the development of renewable energy technology and ensure that growth is inclusive while maintaining a high level of economic freedom.