Energy Efficiency, Consumption, and Economic Growth: A Causal Analysis in the South African Economy
Energy efficiency potentially reduces global carbon emissions, whereas the need of emerging countries to maintain economic growth and development entails a sharp increase in energy consumption. However, to meet this, current energy systems need to be transformed. Several studies find different concl...
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MDPI AG
2025-04-01
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| author | Enock Gava Molepa Seabela Kanayo Ogujiuba |
| author_facet | Enock Gava Molepa Seabela Kanayo Ogujiuba |
| author_sort | Enock Gava |
| collection | DOAJ |
| description | Energy efficiency potentially reduces global carbon emissions, whereas the need of emerging countries to maintain economic growth and development entails a sharp increase in energy consumption. However, to meet this, current energy systems need to be transformed. Several studies find different conclusions on the short-run and long-run relationship and the direction of causality, and none of the studies have considered energy efficiency in their model. This study investigates the direction of causality between energy efficiency, energy consumption, and economic growth in South Africa. To determine if a long-run relationship between the variables exists, the Johanson cointegration test is used, and the results indicate that there is a long-run relationship between economic growth, energy depletion, energy efficiency, non-renewable energy consumption, renewable energy consumption, and energy security, with trace statistics suggesting that the null hypothesis of no cointegration should be rejected at a 5% level of significance. The Toda and Yamamoto procedure of the Granger causality approach was then applied. This study finds a unidirectional causality between energy efficiency, non-renewable energy consumption, and economic growth and no causality between renewable energy consumption, energy depletion, energy security, and economic growth. The growth hypothesis is supported, while the neutrality hypothesis is only confirmed regarding renewable energy consumption and economic growth. The results further suggest that a unidirectional Granger causality exists between non-renewable consumption and energy efficiency, and economic growth in South Africa. In South Africa, energy efficiency is a significant tool to enhance sustainable growth and attain climate objectives. Also, energy efficiency helps to lower the costs of mitigating carbon emissions and further advance both social and economic development. |
| format | Article |
| id | doaj-art-7bcd3a8f537c4be3800fe0c32f51ae39 |
| institution | OA Journals |
| issn | 2227-7099 |
| language | English |
| publishDate | 2025-04-01 |
| publisher | MDPI AG |
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| series | Economies |
| spelling | doaj-art-7bcd3a8f537c4be3800fe0c32f51ae392025-08-20T01:56:16ZengMDPI AGEconomies2227-70992025-04-0113511810.3390/economies13050118Energy Efficiency, Consumption, and Economic Growth: A Causal Analysis in the South African EconomyEnock Gava0Molepa Seabela1Kanayo Ogujiuba2Centre for Entrepreneurship Rapid Incubator, University of Mpumalanga, Nelspruit I200, South AfricaCentre for Entrepreneurship Rapid Incubator, University of Mpumalanga, Nelspruit I200, South AfricaCentre for Entrepreneurship Rapid Incubator, University of Mpumalanga, Nelspruit I200, South AfricaEnergy efficiency potentially reduces global carbon emissions, whereas the need of emerging countries to maintain economic growth and development entails a sharp increase in energy consumption. However, to meet this, current energy systems need to be transformed. Several studies find different conclusions on the short-run and long-run relationship and the direction of causality, and none of the studies have considered energy efficiency in their model. This study investigates the direction of causality between energy efficiency, energy consumption, and economic growth in South Africa. To determine if a long-run relationship between the variables exists, the Johanson cointegration test is used, and the results indicate that there is a long-run relationship between economic growth, energy depletion, energy efficiency, non-renewable energy consumption, renewable energy consumption, and energy security, with trace statistics suggesting that the null hypothesis of no cointegration should be rejected at a 5% level of significance. The Toda and Yamamoto procedure of the Granger causality approach was then applied. This study finds a unidirectional causality between energy efficiency, non-renewable energy consumption, and economic growth and no causality between renewable energy consumption, energy depletion, energy security, and economic growth. The growth hypothesis is supported, while the neutrality hypothesis is only confirmed regarding renewable energy consumption and economic growth. The results further suggest that a unidirectional Granger causality exists between non-renewable consumption and energy efficiency, and economic growth in South Africa. In South Africa, energy efficiency is a significant tool to enhance sustainable growth and attain climate objectives. Also, energy efficiency helps to lower the costs of mitigating carbon emissions and further advance both social and economic development.https://www.mdpi.com/2227-7099/13/5/118economicenergyconsumptiongrowth |
| spellingShingle | Enock Gava Molepa Seabela Kanayo Ogujiuba Energy Efficiency, Consumption, and Economic Growth: A Causal Analysis in the South African Economy Economies economic energy consumption growth |
| title | Energy Efficiency, Consumption, and Economic Growth: A Causal Analysis in the South African Economy |
| title_full | Energy Efficiency, Consumption, and Economic Growth: A Causal Analysis in the South African Economy |
| title_fullStr | Energy Efficiency, Consumption, and Economic Growth: A Causal Analysis in the South African Economy |
| title_full_unstemmed | Energy Efficiency, Consumption, and Economic Growth: A Causal Analysis in the South African Economy |
| title_short | Energy Efficiency, Consumption, and Economic Growth: A Causal Analysis in the South African Economy |
| title_sort | energy efficiency consumption and economic growth a causal analysis in the south african economy |
| topic | economic energy consumption growth |
| url | https://www.mdpi.com/2227-7099/13/5/118 |
| work_keys_str_mv | AT enockgava energyefficiencyconsumptionandeconomicgrowthacausalanalysisinthesouthafricaneconomy AT molepaseabela energyefficiencyconsumptionandeconomicgrowthacausalanalysisinthesouthafricaneconomy AT kanayoogujiuba energyefficiencyconsumptionandeconomicgrowthacausalanalysisinthesouthafricaneconomy |