Does Renewable Energy Consumption and Health Expenditure Decrease Carbon Dioxide Emissions? Evidence for sub-Saharan Africa Countries

This paper employs a number of panel methodological approaches to explore the link between per capita carbon dioxide emissions, per capita real income, renewable energy consumption and health expenditures for a panel of 42 sub-Saharan African countries, spanning the period 1995-2011. The empirical findings provide supportive of a long-run relationship among the variables. Granger causality reveals the presence of a short-run unidirectional causality running from real GDP to CO2 emissions, a bidirectional causality between renewable energy consumption and CO2 emissions, a unidirectional causality running from real GDP to renewable energy consumption, and a unidirectional causality running from real GDP to heath expenditure, while long-run estimates document that both renewable energy consumption and health expenditures contribute to the reduction of carbon emissions, while real GDP leads to the increase of emissions in these countries. The results are expected to be of high importance for policymakers in the region. Both renewable energy consumption and expansionary health expenditures are the major drivers of pollution declines. In that sense the findings imply that a substantial part of the state budget in relevance to health expenditures would be a good path to combat global warming in these countries.