Achieving the SDG7 goal, among other things, requires doubling efforts in energy efficiency improvements. However, in Africa, the progress has been slow, proving difficult for the continent to achieve the target set for 2030. The purpose of this study was to examine the effect of government expenditure (conditioned on external debt finance) on fossil fuel energy efficiency in 28 African countries, using data from 1988 to 2016.

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This article estimates the effect of financial development on electricity consumption for economies with above and below mean human capital index in 45 African countries. The study applied the simultaneous system GMM estimator (adjusted for cross-sectional dependence) and the Aiken and West slope difference test. We performed further robustness checks, such as sample sensitivity analysis to address potential outlier problem. The result showed that the total effect of financial development on electricity consumption is negative, but the direct and indirect effects are different.

The growth-induced effects of financial development have been well-established in the empirical literature, as well as the significance of financial development to energy demand behavior. However, the empirical evidence on the relationship between financial development and energy intensity remains sparse in the literature. Given the multifaceted nature of the effects of financial development, the proposed relationship seems a complex one and warrants an empirical investigation.

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Abstract

The global increase in renewable energy initiatives has been followed by the need to include the social impact of any project as a core element. Significant challenges for renewable energy development include uncertainty in assessing social impacts at local scales, participation and social acceptance. Multi-criteria decision analysis (MCDA) approaches have been widely used in energy planning to address these challenges. This article reviews how social criteria and participation mechanisms have been incorporated into decision-making processes for renewable energy projects.