How critical are resource rents, agriculture, growth, and renewable energy to environmental degradation in the resource-rich African countries? The role of institutional quality

Abstract

Although the literature is being increasingly flooded with studies on the determinants of environmental degradation, the peculiarities of some countries in some regions have been substantially overlooked. Yet, these unique peculiarities either instigate or hinder some factors which matter for environmental quality. This study therefore puts the resource richness of African countries into consideration in the examination of the impacts of resources rents, agriculture, growth, and renewable energy consumption on environmental degradation. Additionally, the influence of institutional quality is uniquely examined in the nexus. The baseline model reveals that environmental degradation is respectively reduced and worsened by renewable energy consumption and growth in both the short- and the long-run. The impacts of agriculture and resources rents vary across the periods, although they both raise the level of environmental degradation. Considering the moderating role of institutional quality, its influence is stronger in the long-run. It reverses the favourable influence of renewable energy, but strengthens the adverse impact of growth. Also, it aids the ability of agriculture and resources rents to reduce degradation. Finally, the threshold results show that the impacts of the indicators on environmental degradation are sensitive to institutional quality levels. Improved institutional quality only changes the size of the impacts of renewable energy use and growth. However, contrary to poor institutional quality, an improved institution results in the ability of agriculture to reduce degradation and militates against the adverse impact of resources rents.