The role of geopolitical risks in shaping energy transition pathways in South Africa: evidence from ARDL approach

Abstract

Abstract Amid growing efforts to combat climate change, geopolitical risks (GPRs) have emerged as both opportunities and constraints to national energy transitions, particularly in developing economies. This study investigates the effects of GPRs on renewable energy consumption in South Africa from 1984 to 2022 using the autoregressive distributed lag (ARDL) bounds testing approach. The results reveal that GPRs significantly decrease renewable energy consumption in the short run but have a positive impact in the long run. Interestingly, we find that economic growth increases in the short run but decreases in the long run. Additionally, trade openness, financial globalization, and government stability were found to have positive effects on renewable energy consumption in the long run but adverse effects in the short run. These findings are consistent across multiple ARDL model tests. The findings underscore the nuanced role of geopolitical dynamics in shaping South Africa’s energy transition and provide actionable insights for policymakers. The findings are valuable for broader climate policy discourse, particularly within the framework of the South African National Development Plan and Sustainable Development Goal 13.