Is there a non-linear relationship between renewable energy consumption and economic growth in Namibia?

Abstract

This paper examines whether renewable energy has an asymmetric or symmetric impact on economic growth in Namibia for the period 1990 to 2020. The study was motivated by the growing importance of renewable energy in the economic growth process of many economies. Further, knowing whether this relationship is linear or not is crucial for policy formulation purposes, yet no such information is known for Namibia. The study used the Wald test to examine the asymmetric relationship between renewable energy and economic growth. The Wald test results revealed that the relationship between renewable energy and economic growth in Namibia is symmetric, both in the short and long run. Hence, the study only estimated the linear ARDL model. The findings indicate that renewable energy has a positive and significant impact on economic growth in the long and short run. Therefore, the study recommends that Namibia's government should continue to pursue policies that will enable the government to expand its renewable energy sources as they contribute to economic growth. This study explores the relationship between renewable energy consumption and economic growth in Namibia, specifically investigating whether this relationship is linear or non-linear. The research is particularly relevant given Namibia's long-term goal of increasing the share of renewable energy in total electricity generation to 60% by 2035. While the study did not identify a non-linear relationship between renewable energy consumption and economic growth, it revealed a consistent positive linear impact of renewable energy consumption on economic growth in both the short and long run.