Determinants of carbon dioxide emission in Rwanda: Evidence from renewable and non-renewable energy

Abstract

Environmental deterioration is a challenge in developing countries. Any use of nonrenewable energy demand for economics progress cause the environment damage, however the consequences of environmental degradation cannot be overlooked. The major goal of this research is to examine the effect of renewable and nonrenewable energy consumption on carbon dioxide emission using quarterly data from 1990 - 2018 in Rwanda. We employ the autoregressive distributed lag (ARDL) bounds test procedure for co-integration, and the estimated ARDL findings demonstrate that nonrenewable energy consumption increases the carbon dioxide emission in Rwanda in short run and long-run. On the contrary, research indicates that renewable has a negative influence on the environmental degradation, the results support the presence of Environmental Kuznets Curve Hypothesis; however, the highest gross domestic product value in logarithmic scale in our data is smaller than the expected turning point. Based on the estimated results, policymakers in Rwanda may implement and encourage renewable source of energy to help satisfy rising energy demand by replacing old traditional sources of energy such as wood and fuel by renewable sources of energy and to attract foreign investors. The renewable energy sources can be used multiple times so that to reduce the carbon dioxide emission and to ensuring Rwanda’s long-term economic development.