Environmental Sustainability and Coal: The Role of Financial Development and Globalization in South Africa

Abstract

Coal is one of the main primary energy resources in South Africa. This energy carrier is also one of the primary indicators in the energy security of the country. This paper is aimed to examine coal consumption and environmental sustainability in South Africa by examining the role of financial development and globalization phenomena using a data set gathered from 1980 to 2017. Based on this paper’s scope, ARDL Bounds, Bavaria, and the combined Hank, FMOLS, DOLS, and frequency domain tests of the causality test are used. Bayer and Hank integration tests and ARDL constraints (with Kripfganz and Schneider’s approximations) showed a common integration between this set. Findings based on ARDL short-term and long-term estimates present that economic development improves environment preservation, while economic growth and coal consumption increased environmental degradation. The frequency-domain causality test results showed that coal consumption and financial development significantly determine the environment’s stability at different frequencies.

Keywords

• coal
• financial development
• globalization
• greenhouse gas emissions