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Driving the Green Transition: The Role of Renewable Energy, Environmental Technology, FDI, and Globalization in South Africa’s Sustainable Growth: Evidence from a CS-ARDL Approach

Year: 2025

Type: article

Abstract: This study investigates the impact of renewable energy, environmental technology, foreign direct investment (FDI), and globalization on green economic growth in South Africa within the framework of the country’s National Development Plan (NDP) Vision 2030, covering the period from 1997 to 2024. Using annual data and applying advanced panel techniques, including the CS-ARDL model supported by AMG and CCEMG estimators, the analysis captures both long-run and short-run dynamics. The quantitative findings indicate that renewable energy exerts a strong positive influence on green economic growth, with long-run and short-run coefficients of 0.318 and 0.142 (both significant at the 1% level). Environmental technology also shows a positive and significant impact, with coefficients of 0.274 in the long run (1% level) and 0.105 in the short run (10% level). FDI contributes positively to green growth, as reflected in the long-run and short-run coefficients of 0.186 (at the 1% level) and 0.083 (at the 10% level). In contrast, globalization exhibits a weak and slightly negative long-run effect, with a coefficient of –0.097 (significant at the 10% level). The significant negative error-correction term confirms a stable long-run adjustment process. These findings imply that renewable energy expansion, technological innovation, and environmentally responsible FDI are crucial pillars of South Africa’s sustainable growth strategy. Based on these results, the study recommends intensifying efforts to promote renewable energy investment, strengthen research and development in environmental technologies, and attract green-oriented FDI through clear regulatory incentives. In addition, trade and globalization policies should be redesigned to ensure ecological balance and compliance with sustainability standards. Overall, the study offers practical policy insights to support South Africa’s transition toward a low-carbon, resilient economy.

Source: Sustainability

DOI: 10.3390/su172310866

Author: Aida Smaoui

Institution: Imam Mohammad ibn Saud Islamic University

Language: English

Topic: Energy, Environment, Economic Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Industry, innovation and infrastructure, Climate action, Affordable and clean energy, Decent work and economic growth

Open Access status: gold

Estimated APC paid: $2,896