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Working Paper 269 - Climate Change and Renewable Energy Generation in Africa
This paper contributes to the economics literature on renewable energy generation by investigating climate-change impacts on renewable energy generation in Africa (with special focus on hydropower generation as it is the main renewable source of power in the continent). The analysis includes 51 African countries over the period 1996- 2012. The econometric approach consists of estimating a model of the determinants of hydroelectricity generation, using dynamic panel framework (system General Method of Moments). The findings suggest that lagged hydroelectricity generation and crude oil price are the main drivers of hydroelectricity generation. Flood occurrence appears to hamper hydroelectricity sector development. We advocate for international commitment in terms of reducing the emissions of greenhouse gases. Moreover, African countries should continue investing in renewable energy technologies to achieve a low-carbon energy mix. Higher taxation or reduction in subsidies of crude oil based technologies could be beneficial to the development of the renewable energy sector.