Re-Examination of The Nexus Between Urbanisation and Non-Renewable Energy Consumption: Empirical Evidence From An Emerging Economy
Re-Examination of The Nexus Between Urbanisation and Non-Renewable Energy Consumption: Empirical Evidence From An Emerging Economy

Summary/Abstract: This study examines whether the impact of urbanization on non-renewable energy consumption in South Africa is asymmetric, using a non-linear ARDL (NARDL) model. The study also examines whether there is an inverted U- shaped relationship between urbanisation and non-renewable energy consumption in South Africa. Employing annual data from 1990 to 2021, the study found no evidence of an inverted U-shaped or a U-shaped relationship between urbanisation and non-renewable energy consumption in South Africa. However, the study found that there is a non-linear relationship between the two variables. Overall, the NARDL results show that positive shocks in urbanisation are associated with a long-run reduction in non-renewable energy consumption, while negative shocks have no significant effects. This implies that as people move to urban areas, they tend to gradually shift from fossil fuel consumption to renewable energy consumption, thereby leading to a decrease in non-renewable energy consumption. Our findings, therefore, show that urbanisation promotes the country's long-term efforts of transitioning from over-reliance on non-renewable energy consumption to renewable energy consumption. They also highlight the urgent need to accelerate the development of renewable energy infrastructure to meet the demands of a growing urban population.

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