Towards Sustainable Environment: Does Electricity Crisis Matter for the Effect of Industrialisation and Urbanisation on Carbon Dioxide Emissions?

Emerging countries including Ghana have witnessed significant growth in their industrialisation and urbanisation. Getting an understanding of their effects on carbon emissions has gained the attention of researchers in recent times. However, the extant studies lack analysis of the moderating role of an electricity crisis on the carbon emission effect of urbanisation and industrialisation. This study assesses the environmental effect of industrialisation and urbanisation in Ghana by analysing how the electricity crisis interacts with the two to affect carbon emissions. This chapter relies on yearly time series data on Ghana and employs the autoregressive distributed lag and fully modified ordinary least squares estimation techniques for regression analysis. The results confirmed the environmental Kuznets curve hypothesis for Ghana, a direct relationship between urban growth and industrialisation on carbon emission, as well as a positive moderating effect of the electricity crisis on carbon emission. Thus, the study confirms that the electricity crisis plays a positive significant role in the industrialisation/urbanisation and carbon emission nexus. A policy implication from the study is that an improvement in Ghana’s electricity sector efficiency can reduce carbon emissions.