The Effects of Energy Consumption, Democracy, Regulatory Quality and Globalization on the Environment in South Africa

This study provides a macroeconomic analysis of the effects of energy consumption, democracy, and globalization on environmental degradation in South Africa. The econometrics tools used in the analysis are based on linear and nonlinear methods. The first chapter provides the introduction and motivation for the study. The second chapter investigates the dynamic effects of energy consumption, democracy, and globalization on environmental degradation in the context of the environmental Kuznets curve (EKC) hypothesis for South Africa between 1971 and 2014. To this end, the study applies the combined Bayer-Hanck cointegration test and Fully Modified Ordinary Least Squares (FM-OLS) estimator. The result confirms the presence of cointegration among the variables and thus validates the EKC hypothesis for South Africa. The third chapter uncovers the role of regulatory quality, energy use, and globalization in the conventional environmental Kuznets curve (EKC) for South Africa by incorporating structural breaks in the series based on quarterly frequency data between 1996:Q1 and 2016:Q4. Applying the Autoregressive Distributed Lag (ARDL) model, all the variables are cointegrated. The results suggest the validity of the EKC hypothesis in South Africa. The results further reveal that the structural break years are statistically insignificant. The causality result establishes a causal link flowing from all the variables to the ecological footprint in the long run. In the short run, economic growth and energy use Granger-cause regulatory quality. The fourth chapter deviates from the existing literature by disentangling the variables into their positive and negative changes to capture asymmetric and dynamic multiplier effects of economic growth, globalization, and renewable energy on environmental sustainability within the framework of the autoregressive distributed lag (ARDL) model. In doing this, the study uses South African data for the period 1990 to 2018 and the results show that CO2 emissions respond differently to the positive and negative shocks in the variables. The thesis, therefore, provides insightful policy suggestions to enhance environmental sustainability in South Africa.