Determinants of Renewable Energy Consumption in Uganda.
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Date
2024-11-04
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Makerere University Business School
Abstract
Globally, renewable energy has gained significant attention as nations strive to increase its share in their energy mixes to mitigate environmental challenges and address the pressing issue of climate change. This study investigates the determinants of renewable energy consumption in Uganda, focusing on GDP per capita, carbon dioxide emissions, access to electricity, trade openness, and human development index. Utilizing a longitudinal research design with time series and quantitative approaches, we analyze data from the World Bank database covering 1990 to 2020. using the STATA statistical package. The analysis reveals both short-run and long-run relationships between Renewable energy consumption (Rec) and various factors, including GDP per capita (Gdp pc), Carbon dioxide emissions (Co2), Access to electricity (AE), Human Development Index (HDI), and Trade openness (TO). Using a Vector Error Correction Model (VECM) analysis, we find that: In the short run, the error correction term is significant, indicating a short-run adjustment process towards long-run equilibrium. This suggests that renewable energy consumption (REC) is adjusting to its long-run equilibrium level. The lagged logarithm of Renewable energy consumption (REC) has a positive and significant coefficient, indicating a strong persistence in renewable energy consumption. This means that past renewable energy consumption (REC) patterns continue to influence current consumption. Human development index (HDI) has a negative but significant short-run effect on renewable energy consumption (REC), while the other factors have no significant effect. However, in the long run, carbon emissions (Co2), GDP per capita (GDP pc), human development index (HDI), and trade openness (TO) have significant (p<0.05) long-run effects on renewable energy consumption. Notably, carbon dioxide emissions (Co2) and GDP per capita (GDP pc) have a significant positive effect on renewable energy consumption, while human development index (HDI) and trade openness (TO) have a significant but negative effect. Access to electricity (AE) becomes collinear with the error term and is thus omitted from the model.
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This is a master's thesis.
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Ayoku, E. (2024) Determinants of Renewable Energy Consumption in Uganda. (Unpublished master's dissertation). Makerere University Business School, Kampala, Uganda.